Diageo unveils $1 billion cost-cutting plan
- Diageo plans about $1 billion in cost savings over three years, including $850 million from operating changes and $150 million from supply-chain initiatives.
- Diageo’s London-listed shares closed 5.6% higher after the announcement, while its U.S. ADR finished at $84.42.
- The company expects low-single-digit organic net sales growth through fiscal 2029 as it targets improved performance, particularly in North America.
Diageo (NYSE:DEO) announced a $1 billion savings programme over three years as the company restructures operations and redirects spending toward future growth.
Diageo now expects low-single-digit organic net sales growth through fiscal 2029, below the previous medium-term target of 5% to 7% that was dropped in 2025.
"There is hard work ahead, particularly in North America, where improving performance is a clear priority," said Diageo Chief Executive Officer Dave Lewis.
Diageo said the programme includes about $850 million of operating-framework savings and $150 million of supply-chain savings, with restructuring costs expected to total about $1.2 billion.
Diageo has not disclosed the total number of jobs affected, while Reuters reported that its London shares closed 5.6% higher and its U.S. ADR finished at $84.42 following the announcement.
Diageo reported fiscal 2026 net sales of $19.64 billion, down 3%, while organic net sales declined 2% and reported operating profit fell 27.2% to $3.16 billion.
The company sells brands including Johnnie Walker, Guinness and Smirnoff across nearly 180 countries and is focusing its strategy on brands, customers and a more cost-efficient operating structure.
