Diageo struggles with weak demand and a stagnating share price.

After the stock recently recovered, triggered by speculation about a potential sale of Guinness or the 34% stake in Moët Hennessy, the company immediately issued a denial. Nevertheless, the stock's reaction shows that investors are open to structural changes. The US market in particular is a concern: Analysts now consider the medium- to long-term growth forecast of 5 to 7 percent as unrealistic.

Industry-wide sales suffer from changing consumption habits. After the boom during the pandemic, many consumers are increasingly forgoing alcohol—a trend further intensified by the growing prevalence of weight loss injections and health warnings about the risks of alcohol. The stock prices of many spirits manufacturers have been under pressure for months.

The previous measures by Crew, who has been at the helm since summer 2023, failed to convince investors. Skepticism grew especially after the profit warning due to a sales decline in Latin America. The CFO Lavanya Chandrashekar resigned shortly thereafter. Now Jhangiani, who comes from Coca-Cola European Partners, is expected to provide a realignment. Expectations for him are high – particularly regarding a more efficient cost structure and sustainable dividend increases.

Diageo is heavily indebted: The company currently reports a net debt of $20 billion, with a leverage ratio of 3.0x EBITDA – at the upper end of the target range. Analysts expect 0.4 percent organic sales growth in the first half and a 2.2 percent decline in operating profit. The margin is likely to shrink by 79 basis points. JPMorgan analyst Celine Pannuti sums up the situation: "We have experienced a boom-and-bust cycle in the spirits industry – now the fundamentals need to be reordered.