Diageo unveiled a $1B savings plan under new CEO Dave Lewis; shares jumped 4%

Diageo — the world's biggest spirits company, home to Johnnie Walker, Smirnoff, Tanqueray, Captain Morgan, Don Julio and Guinness — had been struggling since its January 4, 2022 all-time high, when it was the FTSE 100's third most valuable company at nearly £90 billion (roughly $121 billion). The share price has more than halved since, and was down nearly 13% over the 12 months to August 2026.

For the year ending June 30, 2026, organic net sales declined 2% to $19.643 billion, with North America down 8.4%, though adjusted operating profit rose 2% to $5.7 billion on cost savings partly offset by tariffs. Dave Lewis, who recently took the top job from Debra Crew after she stepped down in July 2025, unveiled a $1 billion three-year savings plan, with restructuring costs of $1.2 billion; savings will be delivered over 2027 and 2028, with additional supply-chain benefits in later years.

"This new strategy, executing with a new, more agile, competitive and cost-effective operating model, gives us confidence that we can return Diageo to a business consistently creating value for shareholders," Lewis said. The three priorities: keep core brands competitive and in line with consumer trends, keep customers central to decisions, and run a more agile and efficient operating framework. Shares jumped nearly 4%, and Citi said the larger-than-expected savings plan more than offset a weaker sales outlook, driving small upgrades to 2027 EPS forecasts.

Shares rose nearly 4% on the day; Citi upgraded 2027 EPS forecasts, saying the larger-than-expected savings plan more than offsets weaker revenue.

The share price had more than halved from its 2022 peak as organic sales declined, including an 8.4% drop in North America.

The savings plan was larger than analysts expected, more than offsetting Diageo's weaker revenue outlook.

A new operating model under a newly arrived CEO gave the market a credible reset story rather than incremental tweaks.

When growth stalls, a credible, costed self-help plan can move the market even before a single saving has landed.

As of the August 6, 2026 announcement, savings were scheduled to land over 2027–2028 with supply-chain benefits continuing later; Citi expected the results to drive the stock up and upgraded 2027 EPS forecasts. Bright spots included ready-to-drink beverages and cocktails, up 35.1% on FIFA World Cup demand for Casamigos, Bulleit and Ketel One serves.