Diageo plc. DEO recently announced leadership changes in its struggling North American business in an attempt to instigate some growth in the segment.
Diageo announced that Deirdre Mahlan, who is currently operating as Chief Financial Officer, will replace Larry Schwartz and will take up the position of President North America. Larry will retire by the end of 2015. However, Deirdre’s replacement has not been decided yet.
Apart from the post of President, Diageo has also decided to make several other changes in management positions in its North American business. It has decided to combine the roles of Open and Control States leadership into one. Tom Looney has been appointed as President, US Open and Control States. Looney is slated to replace Mark Hubler, President Open States and National Accounts who will leave Diageo to join Johnson Brothers Liquor Company effective July 31.
In his 25 years of experience, Looney has held several important positions including General Manager of the Northeast Control Cluster, VP of Finance for both the Control Markets and the former Northeast In Market Company. Prior to being appointed as the President, US Open and Control States, Looney held the position of Chief Commercial Officer where he was responsible for the pricing strategy, business analytics and commercial marketing functions across spirits, beer and wine for North America.
Tom Day has been promoted to the role of President for Diageo- Guiness USA from his current position of Senior Vice President of Sales. Day will also join the North America Executive Team. Tom Day has worked in the beer business of Diageo and has helped improve relationships with distributors and improve performance in beer.
Diageo’s North America business has been suffering from unfavorable foreign exchange movements. In the recently concluded third-quarter fiscal 2015, Diageo’s organic sales increased by a meager 0.9% due to a slowdown in the U.S. spirits market on weaker pricing. Strong performance of the Crown Royal Regal Apple and Smirnoff Red’s brands was offset by weakness in whiskey Captain Morgan.
Currently, Diageo has a Zacks Rank #2 (Buy). Investors interested in the beverage sector may consider Constellation Brands Inc. STZ carrying a Zacks Rank #2 (Buy). Other consumer staples stocks worth considering are Pilgrims Pride Corporation Inc. PPC and The WhiteWave Foods Company WWAV, each with a Zacks Rank #2.
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