Diageo’s Tequila Hangover Just Cost Shareholders Half Their Dividend

Spirits are supposed to lift you, but Diageo’sDEO

latest results did the opposite to shareholders. The makers of Guinness, Johnnie Walker, and Don Julio tumbled 16% Wednesday after new CEO Dave Lewis halved their dividend to fund a turnaround. With consumers spending less, drinking differently, and battling tariffs, the road to recovery looks long and wobbly.

• The half-year dividend landed at 20 cents (vs. 43.1 expected), down significantly 40.5 cents a year prior — though Lewis pledged at least 50 cents for the full year.
• It also markedDEO
  ’s second consecutive cut to a negative sales outlook — as US spirits, tequila, and Chinese baijiu sales plunged 9.3%, 23.1%, and 42.3% from last year, respectively.

Pour one out: Even Jefferies was caught off guard, calling the reset earlier than expected for a CEO barely two months in. But this isn’t Lewis’ first rodeo, having previously rebuilt consumer staples like TescoTSCDY

and UnileverUL

. While a full strategy update is still forthcoming, he already plans to lean into Guinness’ stability, re-price brands, and offload underperformers — just not cheaply. This seasoned executive has rescued bigger ships, but this time he’s fighting against the sobriety tide.