NEWS
PENFOLDS MAKER TWE SHARES TUMBLED 14% ON POOR CHINA & US PERFORMANCE
By Staff Reporter
13-10-2025
Source: TWE
Australia's Treasury Wine Estates (TWE) today pulled its earnings guidance for 2026 and paused an AUD200 million (US130 million) share buyback, citing weak sales of its flagship Penfolds wines in China and distribution challenges in the USA, Reuters news agency reported.
The announcement sent shares of Treasury, one of the world's top five winemakers by volume, down 14 percent to AUD5.99, its lowest point in more than 10 years.
Treasury said sales of Penfolds in China had been weaker than expected due to changing alcohol consumption habits, including fewer large-scale banqueting occasions.
China has been the main driving force for TWE’s growth since Beijing lifted the punitive import tariffs on Australian wines.
"If the performance trends indicated by the preliminary data continue through F26, Penfolds depletions targets for F26 in China are unlikely to be achieved," the company said.
As a result, it said it was no longer appropriate to retain Penfolds guidance for low- to mid-double-digit earnings growth in 2026 and 15 percent earnings growth in fiscal 2027.
In the USA, Treasury said its operations had been disrupted by the exit of its distributor in California, Republic National Distributing Company (RNDC).
The transition to new partner Breakthru Beverage Group would cost around AUD50 million in sales, it said, with negotiations continuing over roughly AUD100 million of inventory held by RNDC.
The setbacks led Treasury to withdraw its group-wide earnings forecast for the 2026 fiscal year and pause a planned AUD200 million share buyback programme announced in August. It already repurchased about AUD30 million of shares.
The winemaker said several initiatives were being implemented to mitigate the impacts of a weaker Chinese market in the year to June 2026, including pursuing opportunities to re-allocate product to select customers in other key markets.
(the writer can be contacted at: info@thewinechronicle.com)
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