Diageo PLC (DEO.US), the global leader in premium spirits production and distribution, has named Dave Lewis, former CEO of British retail giant Tesco PLC, as its new Chief Executive Officer. The unexpected move has sparked a market rally, driving Diageo’s shares sharply higher. The company, which owns iconic brands like Guinness stout and Johnnie Walker, aims to revitalize its core spirits business after a period of significant turbulence.

Lewis is set to assume the role on January 1, following Diageo’s recent downward revision of sales and profit forecasts amid weak consumer spending and potential trade tariff pressures under a renewed U.S. presidential term. In early London trading, Diageo’s stock surged 7.9%, marking its largest single-day gain in five years, reflecting investor optimism about Lewis’s ability to steer the company back to growth. Year-to-date, the stock had fallen roughly 32% prior to the announcement. Similarly, Diageo’s U.S.-listed ADRs jumped over 7% in pre-market trading, despite a 25% decline this year amid operational challenges.

Since former CEO Debra Crew stepped down in July, interim leadership has been led by Nik Jhangiani, who was widely seen as the top internal candidate. However, Diageo opted for Lewis, a seasoned executive with a storied career at Unilever PLC and a reputation as a turnaround specialist. At Tesco, he earned the moniker “Drastic Dave” for slashing costs, closing underperforming stores, and reviving profitability amid an accounting scandal and fierce competition from discounters Aldi and Lidl.

Lewis will step down as Chairman of Haleon PLC, a role he held since its 2022 spin-off from GSK PLC, with Vindi Banga succeeding him on January 1. Analysts praised the appointment: Jefferies’ Ed Mundy called Lewis a “heavyweight leader with deep CEO experience in brand transformation,” while Bloomberg Intelligence’s Duncan Fox emphasized his mandate to “deliver achievable growth targets, strengthen core brands, and expand offerings across price points—not just premium tiers.”

As one of the world’s largest spirits producers, London-based Diageo operates in 180 markets. The hiring of Lewis signals a bold restructuring effort to stabilize investor expectations, reignite growth, and restore market confidence after a dismal earnings report sent shares to near-decade lows. By bypassing internal promotions for a proven turnaround CEO, Diageo’s board has sent a clear message: it’s ready for a major overhaul. “We recognize the severity of the challenges and are committed to genuine strategic change,” the company stated in its recent earnings release.