Diageo, the leading global spirits producer, is implementing a significant cost-saving strategy to address ongoing challenges. The company aims to reduce expenses by $500 million by 2028, which is expected to enhance its annual free cash flow to $3 billion from fiscal 2026. This initiative comes as Diageo grapples with a projected $150 million annual impact from U.S. tariffs on imports from the UK and EU.
Despite these pressures, the company reported a 2.9% increase in net sales, driven primarily by strong demand for Guinness and growth in North America. CEO Debra Crew remains optimistic about Diageo's long-term prospects, although investors express caution regarding the company’s ability to meet its ambitious targets.
Additionally, Diageo is exploring substantial asset sales to streamline its product portfolio, signaling a proactive approach in navigating the current market landscape.
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