An update on performance in its current fiscal year – which started on 1 July – has prompted Treasury Wine Estates to warn of recent sales squeezes in two of its most important markets.
The Penfolds brand owner, which posted a 6.1% increase in sales from fiscal 2025 (to the end of June) in mid-August, issued a trading update to the Australian Securities Exchange today (13 October) that indicated current challenges in China and the US. As a result, Treasury deemed it “no longer appropriate to retain its guidance for EBITS (earnings) growth at a group level in fiscal 2026”.
The company also said it will pause its current AUD200m (US$129.4m) share buy-back scheme “until there is greater clarity around trading conditions and expectations”.
In China, which is a vital market for the Penfolds business, Treasury referred to August’s observation of a “shift in alcohol consumption behaviour” during 2025. The company admitted it is waiting on “complete data for Penfolds’ performance through the key Mid-Autumn Festival period”, adding that should sales indicated by “preliminary data” continue throughout the year, then the brand’s targets in the market for fiscal 2026 “are unlikely to be achieved”.
Over in California, meanwhile, Treasury has been working through a change of distributor, brought on by last month’s withdrawal from the state of Republic National Distribution Co. The switch to Breakthru Beverage Group, lined up in July, has been taking place against the backdrop of talks with RNDC regarding stock valued at around AUD100m (US$64.7m) that is still held by its former distributor.
“While optionality exists regarding the management of this inventory,” Treasury said, “there may be an additional impact to Treasury’s fiscal 2026 shipments and operating plan NSR (sales), depending on what is ultimately agreed … .”
While confirming the abandonment of the profit growth forecast, the performance guidance for the current financial year was not updated more specifically. Treasury is holding its AGM later this week.
The company is set to welcome its new CEO, Sam Fischer, on 27 October, after Tim Ford stepped down after five years at the end of last month.
