Diageo CEO Crew steps down as company pursues turnaround, cost cuts

(Reuters) -Diageo CEO Debra Crew has stepped down after two years in the job, the world's biggest spirits maker said on Wednesday, with finance chief Nik Jhangiani taking over in the interim as the company strives to boost its performance and cut debt.

Shares in the maker of Johnnie Walker whisky and Guinness beer rose as much as 4.5% after the Financial Times first reported the news, before paring gains to trade 1.3% higher at 1309 GMT.

Diageo said Crew was leaving immediately by mutual agreement. It did not give further details but said it was maintaining its forecasts for fiscal 2025 and 2026.

The company is in the midst of a turnaround drive and in May unveiled a plan to cut $500 million in costs and make substantial asset sales by 2028.

The company faces declining sales, particularly in Latin America, where a stock build-up last year triggered a profit warning and shook investor confidence.

Since Crew took over in June 2023, sales have continued on a downward spiral across the sector as high inflation and interest rates force consumers to cut spending.

Her departure also comes just months after John Manzoni took over as chairman of the board.

"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 was among the most highly respected finance chiefs in the sector, who has been regarded as potential CEO material for a while, Jones said.

The company's shares lost about 44% of their value during her tenure.

"Debra has had a tough couple of years at the helm of Diageo and hopefully some new leadership will help to reinvigorate the company," said Fred Mahon, fund manager at Diageo investor Church House.

Still, Diageo's shares have been among the better performers in the European wine and spirits sector, which has struggled after a boom during the pandemic when people drank more at home.

Crew’s departure is the latest in a wave of leadership changes across the consumer goods industry as it battles lacklustre performance, changing tastes among younger, health-conscious consumers and fallout from U.S. tariffs and conflict between major world powers. The world's largest foodmaker Nestle ousted its CEO Mark Schneider last August; Unilever replaced Hein Schumacher in February and on Monday, Band-Aid and Tylenol maker Kenvue fired its CEO.

Under Crew, Jhangiani joined Diageo as chief financial officer in September.

Crew was previously Diageo's chief operating officer and took over the top job after Ivan Menezes' death in June 2023 following a brief illness. She was one of only a handful of women to lead a blue-chip UK company.

Crew and Jhangiani did not immediately respond to requests for comment on LinkedIn.

(Reporting by Pushkala Aripaka and Yadarisa Shabong in Bengaluru, and Emma Rumney in London. Editing by Mrigank Dhaniwala, Mark Potter and Louise Heavens)