- Sales from 12 months to end of June rise 4.4% to AUD2.74bn (US$1.81bn)
- Including Daou Vineyards, top-line jumps 10.7%
- Penfolds soars on China return, climbing 21.2% to AUD1bn
- ‘Americas’ flat (+0.6%) on year prior, ‘Premium Brands’ drags at -8.9%
A combination of the removal of tariffs in China and the addition of Daou Vineyards in California has propelled Treasury Wine Estates back into sales growth after a protracted period in negative territory.
Back in February, the Penfolds owner booked a 2.3% fall in sales from the six months to the end of December. Since then, Treasury has benefitted from the end of punitive tariffs on Australian wine into China and has started to record the sales of Daou following its purchase of the business ten months ago.
Subsequently, sales in the six months to the end of June – the second half of Treasury’s fiscal 2024 – bounced back strongly, resulting in a near-11% lift from the full year. Stripping out Daou’s performance, the top-line was still up, by 4.4%.
On a divisional basis, the group’s Penfolds operations enjoyed a healthy fiscal 2024 period, climbing by 21.2% on the corresponding period to June 2023. While the situation change in China prompted a return to the market towards the end of the year, the brand was also in good health elsewhere in Asia, particularly in Hong Kong, Taiwan and Thailand. The regions of Europe, Middle East & Africa and the Americas were down slightly, however, as stock was reallocated to China.
Price rises were also implemented worldwide for Penfolds at the start of July, Treasury noted.
Over in the ‘Americas’ reporting region, dominated by the US, performance was skewed by the addition of Daou’s numbers, with sales increasing by 19.4%. Excluding the recent addition, the region’s sales inched up by 0.6% as the 19 Crimes brand cycled the benefit from innovations introduced a year earlier. As for Daou, Treasury said the brand’s 12-month sales were up by just over 20% year-on-year.
Finally, the troublesome ‘Premium Brands’ unit, home to the group’s lower-priced wine stable, declined by 8.9% in fiscal 2024 due to what was described as “soft consumption trends in the below AUD15 (US$10) price points, in addition to underperformance relative to the category, particularly in Australia and the UK”.
Having confirmed earlier this month the intention to divest of its sub-AUD10 brands, Treasury added further details in its results presentation. By the start of July next year, ‘Premium Brands’ will be combined with the Americas’ premium portfolio to create a “global premium division”. The consolidation – and planned offloads of brands including Blossom Hill, Lindeman’s, Wolf Blass and Yellowglen – is “the optimal way to drive value from [Treasury’s] premium portfolio brands whilst continuing to leverage scale benefits across its global network”, according to the company.
“Our fiscal 2024 performance reflects the excellent momentum we continue to build behind our luxury brand portfolios in Penfolds and Treasury Americas …,” said CEO Tim Ford. “We have great confidence in both as strong drivers of long-term growth for Treasury Wine Estates.
“In relation to our premium brands, we are focused on improving the performance of this global portfolio …, with implementing key changes to enable the evolution to the new global premium division a key focus through fiscal 2025.”
See below for a company-sourced video, featuring Ford.
