Diageo shares bounce back as new CEO Dave Lewis lifts spirits with $1bn savings plan
Summary
Diageo’s new CEO, Dave Lewis, has announced a plan to save $1 billion over two years by making the company leaner and more flexible. After this announcement, Diageo’s shares rose by 10%, showing investor confidence, but the company also reported a 2% drop in sales and a 27% fall in operating profit.Key Facts
- Dave Lewis, former Tesco CEO, is leading Diageo’s turnaround plan with a goal of $1 billion in savings.
- The restructuring may cause job losses, which Lewis acknowledged would impact employees.
- Diageo shares went up 10% after the announcement of the cost-saving plan.
- The company’s dividend was cut earlier and will stay at a reduced level of $0.50 per share.
- Diageo’s net sales fell 2% to $19.6 billion in the year ending June 2026.
- Operating profit dropped 27% to $3.16 billion, partly due to one-time costs from restructuring.
- The $1 billion savings come from a $1.2 billion overhaul which is already in progress.
- Diageo owns famous brands like Johnnie Walker and Smirnoff.
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