Treasury Wine Estates’ FY25 results have met expectations, but emerging market softness is raising concerns about the company’s future performance, according to RBC Capital Markets analyst Michael Toner. Treasury Wine Estates is a global wine company that owns a portfolio of brands including Penfolds, Wynns, and Wolf Blass. The company is involved in viticulture, winemaking, and distribution.
While the group’s overall earnings before interest, taxes, and stock-based compensation aligned with consensus forecasts, its Americas net sales revenue fell short of RBC’s estimates by 4.8 per cent. This shortfall was attributed to weaker performance in the premium and commercial segments, particularly impacting the ’19 Crimes’ brand. Despite the revenue dip, margin improvements driven by product mix and operational synergies enabled the Americas’ EBITS to meet expectations.
Toner highlighted that a recent distributor change in California is projected to reduce net sales revenue by approximately $50 million. This change is likely to result in flat to slightly lower group EBITS for FY26, which contrasts with consensus forecasts anticipating around 3 per cent growth. Another key concern for the Penfolds brand is whether the recent softness observed in Chinese consumption patterns during June and July will persist throughout FY26.
Despite these challenges, Toner maintains an ‘outperform’ rating on Treasury Wine Estates, setting a price target of $10.70. However, he also noted risks associated with evolving market dynamics in both the Americas and China. Shares in Treasury Wine Estates were up 3.1 per cent to $7.87 at 11.27am AEST.
