Another weak market update and share price plunge this week will have left the beleaguered new CEO of Diageo Debra Crew “fighting to keep her job”, according to analysts.

The booze giant disappointed the market on Tuesday by posting a decline in both organic sales and profits as a heavy sales fall in Latin America and the Caribbean hit annual performance.

In its full-year results for the year to 30 June, Diageo reported net organic sales had declined by $129m, or 0.6%. Volumes were down by 3.5%, primarily driven by a 21.1% plunge in its Latin America and Caribbean region due to “fast-changing consumer sentiment” and persistent consumer downtrading.

That volume decline was only partly mitigated by a 2.9% rise in price/mix as inflationary price rises weakened during the year. Therefore, overall reported net sales were down 1.4% to $20.3bn due to an unfavourable foreign exchange impact and the organic net sales decline, partially offset by hyperinflation adjustments.

Organic operating profit was also down by 4.8% or $304m, of which $302m was attributable to the issues in Latin America. Reported operating profit grew 8.2% as it benefited from exceptional operating items in the period.

Diageo argued it had taken action to remedy the inventory problems that led to its November profits warning. It also pointed out organic net sales grew $330m or 1.8% excluding LAC, albeit this was driven by price/mix gains of 3.9 ppts. Volumes fell 2.1%, most notably in North America.

The group increased its annual dividend to appease investors, but shares fell 5.1% on Tuesday to 2,418p, having dropped by double-digits to as low as 2,275p in morning trading.

A scathing Russ Mould from AJ Bell commented: “Diageo has gone from bad to worse… it can dress up the numbers all it wants, but it’s clear that something major has to change.

“Following the latest sell-off, Diageo’s share price is now trading at a seven-year low. That’s the market’s way of saying it is thoroughly unimpressed with the business… Debra Crew will be fighting to keep her job as chief executive. If the board doesn’t do something, one can expect activist investors to circle Diageo and push for new leadership.”

Jefferies bemoaned the slow turnaround progress, noting: “For the shares to work, investors need confidence that the downgrade cycle is over and that medium-term growth 5-7%, with margin expansion, is still a realistic prospect. The downgrade cycle is well progressed and the business will bounce back; however, the growth [level] is still some way off.”

Diageo shares are now down by almost 30% year on year and hit their lowest levels since 2017 during the week.

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