The Treasury Wine Estates Ltd (ASX: TWE) share price is in focus today as the company updated investors on its F26 performance expectations, flagging headwinds in China and the United States and withdrawing previous EBITS growth guidance for both Penfolds, Treasury Americas, and the Group.
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What did Treasury Wine Estates report?
- Penfolds 1Q26 shipments matched expectations globally, but depletions in China remain below plan
- Treasury Americas' portfolio outside California grew depletions over 5% (ex-California), but California was impacted by distributor transition
- Treasury Collective performed in line in Australia and EMEA, but US results were hampered by Californian distributor changes
- Guidance for low-to-mid double-digit EBITS growth for Penfolds and modest EBITS growth for Treasury Americas in F26 withdrawn
- On-market share buy-back paused after $30.5 million spent to date (15% complete)
- Strong capital position: $1.0 billion liquidity and solid financial covenants headroom
What else do investors need to know?
Penfolds' depletions in China, a critical market, remain subdued despite some improvement around the Mid-Autumn Festival, with full data still pending. If current trends persist, Penfolds likely won't meet its China depletions targets for the year. Management is implementing measures to mitigate the China impact, such as reallocating product to other key markets while being careful to avoid grey imports back into China.
In the US, Treasury Americas continues negotiations with its former distributor, RNDC, as it transitions to a new partner, Breakthru Beverage Group. The outcome could lead to further one-off impacts, especially regarding the treatment of $100 million (NSR value) of inventory held by RNDC. This adds extra uncertainty to FY26 results.
Treasury Collective's US performance was similarly affected by distributor transitions, causing a shift in EBITS delivery to the second half of the year. Across the group, uncertainty has led TWE to pause its on-market share buy-back until market conditions stabilise.
What's next for Treasury Wine Estates?
Treasury Wine Estates is not providing revised guidance for F26 at this stage, citing continued uncertainty in major markets. However, the company remains focused on maintaining the long-term strength of key brands, especially Penfolds, with careful pricing and ongoing investment in marketing and distribution.
With a flexible global sales model and strong capital base, TWE expects to navigate ongoing disruptions, aiming to drive growth where market conditions allow. The Annual General Meeting is scheduled for Thursday, 16 October.
Treasury Wine Estates share price snapshot
Treasury Wine Estates shares have fallen 43% over the past year, trailing the S&P/ASX 200 Index (ASX: XJO) which has risen around 9% over the same period.
