Dave Lewis Unveils $1 Billion Savings Plan to Revive Diageo's Global Spirits Business
Dave Lewis, the CEO of Diageo, announced a major restructuring plan to secure $1 billion in savings over the next three years. The world's largest spirits company, which produces brands like Guinness and Johnnie Walker, aims to use this cost-cutting strategy to return the business to consistent growth. While restructuring costs are expected to amount to $1.2 billion, the plan focuses on making the company's operating model more agile and competitive. This move comes after a period of weaker sales and profits. Diageo reported a 3% decline in net sales to $19.6 billion for the year ending June 30, largely driven by a weak performance in North America. However, the company saw strong growth in Europe and Great Britain, particularly for the Guinness brand. Shares rose significantly following the announcement, as analysts noted that the larger-than-expected savings plan more than offsets the weaker revenue outlook. Lewis noted that hard work is ahead, particularly in the North American market where prices and tequila demand have softened.