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 EBITS of AUD 236 million and a statutory NPAT loss of AUD 626 million due to U.S. asset impairment. Strong depletions growth in key brands, especially Penfolds in China, offsets market challenges. Project Ascent targets AUD 100 million in cost savings from FY 2027.
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 Challenges in China and U.S. markets led to withdrawn guidance and a paused share buyback, but long-term fundamentals and sustainability initiatives remain robust.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. Guidance for F25 EBITS is at the lower end of the range, with continued focus on luxury and premium brand execution.
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 portfolio momentum drove double-digit EBITS and NSR growth, with Penfolds and Treasury Americas each surpassing $1 billion in NSR. FY25 guidance targets further luxury-led growth, DAOU integration, and premium brand restructuring, while managing risks from commercial divestment and China market dynamics.
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Penfolds targets strong multi-year growth, with FY24 EBITS up ~15% and margins at 42%, rising to 45% by FY26–27, driven by global price increases, record vintage intake, and expanded China investment. Brand health and demand in China are robust, with a refined distribution model and scalable supply chain supporting long-term ambitions.
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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.