The Treasury Wine Estates Ltd (ASX: TWE) share price is falling on Monday.
In morning trade, the wine giant's shares are down 0.5% to $11.35.
Why is the Treasury Wine share price falling?
Investors have been selling the company's shares today despite the release of a first-quarter trading update ahead of its annual general meeting. This may be due to broad market weakness following a poor night on Wall Street on Friday.
In respect to the update, management revealed that first-quarter trading conditions were consistent with expectations, and it expects continued strong demand for luxury wine and resilient category dynamics for premium wine globally.
In light of this, Treasury Wine's CEO, Tim Ford, is optimistic that the company is on track to achieve its long-term ambitions. He said:
We remain well positioned to deliver growth in line with our long-term ambition, and EBITS margin expansion towards the 25%+ Group target. This growth will be supported by the strength of our global brand portfolio, our diversified business model and the benefits of key asset base and cost optimisation initiatives delivered in FY23.
Ford also spoke a little about expectations for FY 2024, highlighting that the company is preparing for a review of China's tariffs on Australian wine. He adds:
F24 Group EBITS is expected to be second half weighted, reflecting our planned and measured approach to phasing of Penfolds shipments, particularly for the Icon and Bin portfolio, across the year to retain flexibility in our global distribution and pricing models. As we mentioned at our results, this is a specific strategy in light of the potential for a future review of tariffs on Australian wine in China. We expect this to result in an approximate 45/55% split of Group EBITS across the year.
The Treasury Wine share price is down 10% over the last 12 months.
