The Guardian reported on Tuesday that drinks giant Diageo reported a 28% drop in profits over the last year and claimed it will focus on cost-cutting measures as the spirits market continues to struggle. The company shared that savings were “not about job cuts,” but “some” roles would be eliminated.
Diageo claimed it was expecting another blow to the tune of $200 million due to Donald Trump’s tariffs, which went into effect on goods from the UK starting on June 30. Diageo claimed its intent was to remain “focused on what we can control” regarding the situation.
The company is additionally in search of a new CEO, after its former CEO Debra Crew, stepped down in July. The Guardian reported that month that under Crew’s leadership, Diageo suffered from “lackluster performance.” Interim Diageo CFO Nik Jhangiani currently runs Diageo, and the outlet reports that he might just be a favorite for the position.
Crew obtained the role of CEO in 2023 after the death of Ivan Menezes, a titan within the industry. Menezes made many contributions to the company, including developing the iconic Johnnie Walker “Keep Walking!” marketing campaign. Less than six months into Crew’s tenure, the Guardian reported a profit slump in Latin America and Caribbean markets.
Diageo Shares its Action Plan For a Bumpy Year
The Spirits Business reported on Wednesday that Diageo aimed to increase savings by $125 million. When it released its yearly fiscal results, it reported that net sales were up 1.7% in spite of challenges. Other actions the company intends to take to further cut profits involve potentially removing “non-core” and “non-strategic” brands, which appear to be in alignment with the company’s actions over the past year. In January, Diageo did exactly that when the spirits supplier sold off the Cacique rum brand to a European company called Bardinet, a heavy-hitting Spanish company.
Regarding Diageo’s hunt for its next CEO, the Diageo Chairperson, John Manzoni, thanked Crew for her work at the company.
“The board’s focus is on securing the best candidate to lead Diageo and take the company forward,” Manzoni shared, according to The Guardian. “We strongly believe Diageo is well placed to deliver long-term sustainable value creation.”
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