Diageo CEO Debra Crew Steps Down Amid Struggles; CFO Nik Jhangiani Named Interim Leader

Debra Crew, CEO of Diageo, maker of Guinness and Johnnie Walker, has stepped down by mutual agreement after just over a year in the role.

Diageo’s chair, John Manzoni, said:

“On behalf of Diageo and the board, I would like to thank Debra for her contributions to Diageo, including steering the company through the challenging aftermath of the global pandemic and the ensuing geopolitical and macroeconomic volatility… On behalf of all Diageo colleagues, I wish her every success in the future. The board’s focus is on securing the best candidate to lead Diageo and take the company forward. We strongly believe Diageo is well placed to deliver long-term, sustainable value creation.”

Nik Jhangiani, the company’s Chief Financial Officer, has been appointed interim CEO while a permanent replacement is sought.

Crew’s short tenure was marked by a profit warning in November 2023 due to overstocking in Latin America. The company faces ongoing sluggish sales, especially in the US and post-pandemic markets. Investors express discontent over performance and supply chains, like the UK Guinness shortages during the holidays.

Diageo shares dropped 44% during Crew’s time as CEO. The company is in the middle of a turnaround strategy, including a $500 million cost-cutting plan and asset sales by 2028.

After the announcement, Diageo shares jumped 4.5% on the news of Crew’s departure but later pared gains to 0.7%. European markets were cautiously higher overall, with Diageo’s move reflecting investor hope for a strategic reset.

Chris Beckett, an analyst at Diageo investor Quilter Cheviot, said:

“Without a macro improvement in some of the key markets, I think it’s a very difficult fix.”

The departure of the CEO raises questions over the long-term leadership.

“CFO and Interim CEO Nik Jhangiani has to be a candidate for the permanent role, but whoever gets it, we don’t think Diageo’s problems will be easily resolved,” RBC Capital Markets analyst James Edward Jones said.

Jhangiani is seen as a strong internal candidate for the permanent role, though he lacks a background specifically in spirits. He joined Diageo from the soft drinks industry and has quickly earned respect within the company and among analysts.

Diageo is not alone in its struggles. Rivals like Pernod Ricard and Rémy Cointreau are also battling changing consumer preferences, inflation pressures, ongoing US tariff uncertainty, and geopolitical disruptions in markets like Ukraine and the Middle East.

“Debra has been unfortunate in that she took the reins at a really tricky time,” said Fred Mahon, fund manager at Diageo investor Church House, adding new leadership could reinvigorate performance. “We’ll wait and see the results rather than conclude they’ve turned a corner.”

With input from CNBC, Reuters, and the Guardian.