Debra Crew’s departure from Diageo PLC (LSE:DGE) is unlikely to mark a turning point for the world’s largest spirits group.
In RBC’s view, the move, announced yesterday with immediate effect, was hardly unexpected given the Guinness maker's performance under her leadership, with total shareholder returns down 39% in euro terms.
But the Canadian bank notes that this drop is in line with a sector that has struggled across the board: Pernod Ricard and Campari have both fared worse.
The problem, according to analysts James Edwardes Jones and Wassachon Udomsilpa, is not just about leadership.
The spirits industry itself is under sustained pressure from weaker demand, post-pandemic normalisation and shifting consumer habits.
Even with a new CEO, Diageo is unlikely to recover swiftly unless the sector stabilises.
RBC argues that Diageo has lacked urgency. As the clear market leader, it should be setting the pace, not lamenting sluggish growth.
Interim CEO Nik Jhangiani, who is highly regarded by investors, has moved quickly to scrap the company’s outdated 5–7% growth guidance and focus on tighter cost control.
That pragmatic tone has been welcomed, though full-year guidance remains unchanged and investor confidence is still fragile ahead of results in August.
Importantly, RBC casts doubt on the group’s valuation. At 17.8 times forecast 2026 operating profit after tax, the shares do not look obviously cheap.
The investment case, once built around “affordable luxury”, has weakened, and investor expectations are now more in line with traditional consumer staples businesses.
Until there is clarity on whether industry headwinds are structural or temporary, a change at the top won’t be enough to lift the share price on its own.
Diageo may need more than new leadership; it may need a reset in how it tackles a changing global drinks market.