Australia · Delayed Price · Currency is AUD Treasury Wine Estates Earnings Call Transcripts
Fiscal Year 2026
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A multi-year transformation will focus on 10 priority brands, a regional operating model, and a streamlined supply chain to drive sustainable earnings growth and margin expansion. Increased investment in brand building, innovation, and digital capabilities will support outperformance in key markets, while disciplined capital management and cost reductions aim to restore financial strength.
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H1 2026 saw strong underlying brand performance but was overshadowed by a significant non-cash U.S. asset impairment, leading to a statutory loss. Decisive actions on inventory, cost, and capital structure are underway, with positive depletions growth and a focus on sustainable, profitable growth.
Fiscal Year 2025
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Performance expectations have been revised due to ongoing weakness in the U.S. and China, prompting inventory reductions and a transformation program targeting AUD 100 million in annual cost savings. Strategic actions include portfolio streamlining, operating model simplification, and enhanced execution, with a focus on protecting brand value and maintaining capital flexibility.
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The meeting reviewed strong FY25 results, with luxury wines driving growth and a higher dividend. Challenges in China and U.S. markets led to withdrawn guidance and a paused share buyback, but long-term fundamentals and sustainability initiatives remain robust.
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Net sales revenue rose 7.2% to $2.9B and EBIT grew 17% to $770.3M, led by Penfolds and DAOU. FY26 guidance anticipates further EBIT growth, with a $50M NSR impact from the California distributor transition and continued focus on luxury-led strategy and shareholder returns.
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Fiscal 2025 EBITs are expected to rise 17% to $770 million, driven by luxury brands Penfolds and DAOU, with continued growth forecast for FY26. A new divisional model launches July 1, focusing on luxury-led growth, while a 5% share buyback is planned. Penfolds' FY27 EBITs growth guidance of 15% remains unchanged.
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Luxury-led growth drove a 35% EBITS increase, with Penfolds and DAOU delivering standout results. Group NSR rose 20%, margins expanded, and cash conversion was strong, though premium and commercial segments lagged. F25 EBITS is forecast at AUD 780 million, with continued focus on luxury expansion.
Fiscal Year 2024
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The meeting highlighted strong luxury-led growth, a major acquisition, and a strategic shift away from commercial brands. Shareholders approved all resolutions, and the company emphasized sustainability, responsible investment, and ongoing adaptation to industry challenges.
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Luxury wine drove strong FY24 growth, with EBITS up 12.8% and both Penfolds and Treasury Americas surpassing $1 billion in NSR. FY25 guidance targets further luxury-led gains, while commercial brand divestment and DAOUU integration progress.
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Penfolds targets strong multi-year growth with 15% EBITS increases in FY26–27 and a return to 45% margins, supported by record 2024 vintage intake, global price increases, and significant investment in China. The brand maintains a diversified global strategy, with robust demand and a refined distribution model.
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Luxury wine now drives the majority of growth, with DAOU at the center of a focused, high-margin strategy. Integration is on track, synergies are expected to exceed $20 million, and the business is positioned for long-term expansion in the U.S. and internationally.