Every time I think Diageo (LSE: DGE) Shares are about to emerge from their decline, and another crisis is dragging them down. How much can investors take?

the FTSE 100 index The spirits giant was once seen as one of Britain’s most trusted companies. That changed with a surprise earnings warning in November 2023. Since it was mainly a matter of declining sales in one region, Latin America and the Caribbean, I hoped this was just a temporary dip and accepted. Unfortunately, the company has gone from one problem to another since then.

As the cost of living crisis swept the world, Diageo’s strategy of focusing on premium brands backfired. Wine drinkers began trading in cheaper options to save money. Inventory issues didn’t help.

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There was little the company could do about US tariffs that affected sales of Canadian whiskey and Mexican tequila. Its long-serving CEO, Ivan Menezes, died suddenly in 2023, leaving his successor, Debra Crowe, to weather the storm as profits continue to decline.

As if that wasn’t enough, the group now faces two long-term threats. Younger consumers appear to be drinking less alcohol, while weight loss drugs such as… And goofy and Monjaro It may also suppress the urge to drink. About the only bright spot has been the booming popularity of Guinness.

She welcomed the Board of Directors’ decision to appoint the former Tesco Dave Lewis, who specializes in the transition as CEO after Crew’s quick departure. I even dropped the average after the announcement. But I had one nagging concern.

When Lewis arrived at Tesco, he began a classic bout of ‘kitchen sinking’, searching for as much bad news as possible and getting it out into the open. It made the short-term picture look dire, but it created a cleaner platform for recovery. And he’s done it again at Diageo.

Profits are still declining

Full-year results released on February 25 sent shares lower again. Adjusted operating profit fell 2.8% to $3.3 billion, while the company lowered its 2026 guidance for the second time in three months. Organic net sales are now expected to decline by 2% to 3%, amid weak sales in the United States and a decline in white spirits in China.

Louis also delivered the blow I feared most. Just as Diageo was starting to look like a respectable income stock with a 5% yield, he cut the dividend in half. He says the move will strengthen the balance sheet and financial flexibility. Diageo shares are now down about 30% over the past year and about 50% over the two years.

I’m not happy, but I’m not sold. Lewis has spotted new opportunities for growth and rejected the idea that younger consumers have permanently turned their backs on alcohol. If Diageo hasn’t reached the point of maximum pain yet, it should be getting close. It may take two or three years to recover, but I still believe it will come. For now, patience is required.

In today’s volatile markets, stocks may be worthwhile for investors with a long-term view. If they fall further, I may fall back myself again. However, plenty of other FTSE 100 stocks look attractively priced at the moment. And without the same huge problems that Diageo faces.