Treasury Wine Estates has removed its full-year earnings guidance and paused a A$200m (£98m) share buy-back programme, citing weak sales of its Penfolds brand in China and distribution changes in the US.
Shares in the publicly listed Australian wine company tumbled by more than 15% to a 10-year low as investors swallowed the news.
Sales of its Penfolds label in China had been weaker than anticipated over the past quarter, Treasury said.
“If the performance trends indicated by the preliminary data continue through F26, Penfolds depletions targets for F26 in China are unlikely to be achieved,” it said.
Several initiatives are were being implemented to mitigate the impact of weak sales in China, including pursuing opportunities to re-allocate product to other markets.
However, it was no longer appropriate to maintain Penfolds’ guidance for low to mid double-digit earnings growth in 2026, and 15% earnings growth in 2027, Treasury admitted.
“Given the uncertainty that remains as to the outlook, TWE is not in a position to provide revised guidance at this point in time,” it added.
In the US, Treasury said its performance had been impacted by a change of distributor in California.
The transition from RNDC to Breakthru Beverages was likely to result in a A$50m hit to sales, it said. Negotiations continued over approximately A$100m of stock currently held by RNDC, it added.
“As a result of the uncertain outlook in relation to Penfolds and Treasury Americas, TWE has formed the view that it is no longer appropriate to retain its guidance for EBITS growth at a group level in F26,” a statement from Treasury said.
Additionally it was “appropriate and prudent” for the supplier to halt its A$200m share buy-back programme until there was “greater clarity around trading conditions and expectations”, it said.
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