EU STAPLES - Back on the Radar: Longs; Shorts; “Not Yets”

Research evidence excerpt

EU STAPLES - Back on the Radar: Longs; Shorts; “Not Yets”

Olivia Petronilho - Specialist Sales - European Consumer AC (44-20) 3493-3709 Europe Specialist Sales J P M O R G A Nolivia.b.petronilho@jpmorgan.com

J.P. Morgan Securities plc 16 June 2026

Q1 LFL driven by positive RIG across categories and markets (except China) and a confident tone on guidance, going straight

back into investors’ radars - but not their books just yet, is my sense. All eyes on RIG ahead.

#3: Diageo. The company will present its new strategy under new CEO David Lewis in August 6th. I used to say “When is the

time to buy Spirits?” was one of the most asked questions in my chats. That has now been replaced by “Will David Lewis kitchen

sink in the CMD or not?”. A very lively debate and no consensus out there: Some believe there are plenty of room for cost cutting

at Diageo, and thus an expected pricing revision across the brand portfolio (especially in the US) can be offset, while others

believe there will be a margin reset to reflect lower prices in some categories/brands; mix changes with potentially higher

relevance of RTDs; and adjustments to A&P. I’ll also be looking for his views on MT growth outlook for the Spirits market. It

feels to me there are only two very binary potential outcomes from the CMD: we’ll either get some hopes we are close to

troughing and there is light at the end of the tunnel (post some price adjustments); or we will learn there is still limited visibility

on how deep is the volume contraction / pricing correction needs rabbit hole.

J.P. Morgan Consumer Contacts

EU Consumer Specialist

Olivia Petronilho

olivia.b.petronilho@jpmorgan.com

+44 207 134 2676

US Consumer Specialist

Briggs Barton

briggs.barton@jpmorgan.com

+1 212-622-2677

APAC Consumer & Internet Specialist