Diageo, the British drinks giant behind Guinness and Johnnie Walker, has slashed its dividend as new CEO Dave Lewis moves to shore up the company's finances amid declining sales. The decision marks a significant shift in strategy as Lewis seeks to build 'financial flexibility' in response to challenging market conditions.

Lewis, who took over from outgoing CEO Ivan Menezes last month, faces mounting pressure to reverse the company's fortunes after several quarters of disappointing performance. The dividend reduction comes as Diageo struggles with weakened demand in key markets and rising costs that have squeezed profit margins. The move signals Lewis's determination to prioritize long-term stability over short-term shareholder returns.

Industry analysts view the dividend cut as a pragmatic response to Diageo's current challenges, though it may disappoint income-focused investors who have long relied on the company's generous payouts. The decision reflects broader headwinds facing the global spirits industry, including inflationary pressures and shifting consumer preferences. Lewis's early actions suggest a more conservative financial approach as he works to stabilize Diageo's position in a competitive market.