When landing a new job, nothing puts a spring in the step like knowing that the news of your appointment has boosted your employer’s stock market value by over £2bn.
Dave Lewis can be forgiven for fulfilling the trust – raising the number at the front of mind, as he faces the challenge of transforming Diageo.
London’s intoxicating orbo alcohol business runs a sprawling global empire where the sun never sets but whose glory rests on Wane.
News that Diageo had not only ended an uncomfortably-long four-month recruitment drive – but had sent for the man widely credited with saving Tesco – boosted the misfiring booze group’s shares soaring by as much as 7% on Monday.
With Lewis formally starting the job in fact, on January 1, many customers will recover from an over-recovery of the diageo brands of Johnnie Walker and Guinness.
For the considered boardroom executive, the list of New Year’s resolutions is daunting.
Earlier this month, the investment website Motley Fool asked if it was “game over” for investing in Diageo, one of the FTSE 100’s traditional “defensive” stocks, the City term for safe bets that are resilient to economic downturns, such as pharmaceuticals and utilities.
A trading update sent shares to a 10-year low, another unwelcome milestone in the Grim Slog of Diageo’s Post-Pandemic Journey.
A hoped-for “roording twenties” rebound “not only in pubs and bars but in the wider spending victimized by the cost of the development of the living crisis.
There were strategic missteps as well, resulting in the summer outing of Debra Crew’s fortunes, pointed to the unexpected death of Diageo’s Ivan Menezes.
His tenure was marked by a shock warning caused by a supply problem in Latin America that caught Diagado’s Napingement.
In the run-up to last year’s Christmas, Diageo appeared to have again faulted its supply chain, with pubs complaining that their supply of Guinness had been reduced.
Rumors swirled that the crew, a former US military intelligence captain, might get the big guns. Potential strategic bazookas include an £8bn sale of the Guinness Brand or Marageo’s 34% stake in champagne and cognac business Hennessy.
Diageo insiders are understood to have admired Crew’s grasp on what needed fixing but felt she lacked the bold strategic vision to steer the company out of the doldrums, let alone the ability to convince the City that she could.
The cause of strategic concerns are long-term trends, such as declining rates of drinking, especially among young people.
Last August, Fundsmith, the investment company run by City veteran Terry Smith, sold its holding to Diageo, a stake it had held since 2010.
Smith highlighted the rise of weight-loss drugs like Wegegy and Ozemptic. This, he said, shows signs of effectiveness in helping people cut down on their drinking, threatening the global trade in booze.
Many times called for “Dreas Dave”.
Lewis earned the moniker for almost three decades of consumer juggernaut unintentionally and cemented it with Tesco.
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Diageo may be suffering from a malaise but the supermarket giant inherited a company in dire financial straits and is about to improve profits by trading at £250m.
As he had unilever, Lewis showed a flowing profit in the cost, struck thousands of jobs like electrical centers in its garden gardens.
“Dave Lewis is ‘Mr Fixit’ as far as the market is concerned,” said Dan Coatsworth, Head of Markets at Stockbroker AJ Bell.
Javier Gonzalez Lastra, the head of European Advertisements Research at Berenberg, attracted a “very step”, predicting that Diageo’s culture of speed.
But how many steps can slippery dave take from his TESCO shopping bag?
Aj Bell thinks Lewis will live up to the Guinness Salness talk, something that Diageo denied giving serious consideration earlier this summer.
A less drastic option could include a fire sale of some of Diageo’s stable of around 200 brands, which generate around £2.7bn a year, more tightly focused on the best discontinued labels.
Despite the misfortunes, diageo has managed to avoid cutting its division. Chris Beckett, a consumer staples analyst at Quilter Ceviot, thinks Lewis has a license to cut through the plaster-gofic for price sharing for price sharing.
Beckett pointed out that the adawholder exchange was one of Lewis’s first acts when he reigned at Tesco in 2014, “Whether you accept it as ‘Kitchen it’s sinking’ or just accept an overmeravered balance sheet”.
But macroeconomic challenges remain.
Consumer confidence remains bleak around the world, as Donald Trump’s Tariffs continue to wreak havoc on consumer goods. In the long term, questions remain as to when the Effects of Drugs on Weight Loss – And the authenticity of generation Z – cyclical or new trends.
Some things even dry dave can’t fix.