Not-so-drastic Dave: Diageo boss defies expectations of slash-and-burn reign
‘Drastic Dave’ Lewis, who gained a reputation for cost-cutting and ruthless rationalisation during his time at Unilever and Tesco, was more ‘demure Dave’ when announcing Diageo’s first results of his tenure as chief executive.
The spirits giant has been struggling in recent years, with its share price down 22 per cent year-on-year – and Lewis’ appointment was expected to bring a welcome shakeup to the Guinness maker’s operations.
The FTSE 100 giant, which also owns spirit brands Smirnoff, Johnnie Walker and Captain Morgan, has suffered from tight margins as consumers turn to low alcohol alternatives and cheaper brands.
When Diageo’s results came on Wednesday morning, which saw the dividend slashed in response to falling sales, it looked as if Drastic Dave had arrived.
But speaking to analysts following the results, Sir Dave struck a remarkably measured tone as he refused to be drawn on rumoured asset sales.
The CEO instead pledged to act “surgically” on pricing to boost sales, pouring cold water over any expectations of an immediate structural shake-up.
‘No benefit in being quick and incomplete’
When quizzed by an analyst on why the next market update was scheduled so late as this year’s third quarter, Lewis was careful to lower expectations of a slash-and-burn approach to cost-cutting.
He said: “I just want to make sure that I’ve got the firmest of foundations in understanding the business we have today. There’s quite a lot of engagement [to be done] with the executive around strategic options, choices [and] consequences that need to be fully explored and evaluated.
“A lot of work on the way there, but we need to then get ourselves as a team through that evaluation and those alternatives, we then need to engage with the board and then, depending how quickly that goes, I’ll be in a position where we can share it with other stakeholders.
“One thing I won’t do is rush. I don’t think there’s any benefit here in being quick and incomplete. I need to make sure that we do that properly.”
Dave keeps his cool in face of tariffs
Diageo has warned previously that it faces huge costs from US President Donald Trump’s tariff regime, and Wednesday’s report reiterated its $200m price tag for this pain – despite recent movements around the legality of the trade measures.
The spirit maker’s interim results saw sales plunge by 7.4 per cent in North America – a region which makes up 36 per cent of its total market – to $3.8bn in the six months to December 2025.
But the CEO was adamant that Diageo will not act rashly in addressing these plummeting sales.
He told analysts: “In North America, which is obviously a focal point, we’ve got FIFA [World Cup] in the second half of this year so the idea that we were to change any of the plans in the second half of the year just really isn’t an opportunity for us.
“So I don’t think you should [expect] to see any material changes in the next six months as a result of the comments that I made this morning.”