Penfolds shields dip in Treasury Wine Estates annual profit

The news: Australia’s top winemaker Treasury Wine Estates has posted a drop in full-year profit and sales, but a strong performance by its high-end Penfolds brand helped it boost margins.

The numbers: The company reported a 3.3% decline in full-year net profit to $254.5 million, while revenue fell 2.2% to $2.4 billion. However, earnings jumped 11.4% to $583.5 million, in line with guidance provided in May. Its Penfolds division delivered earnings of $364.7 million, a 14.2% increase on the previous year. Treasury has declared a final dividend of 17 cents per share, up from 16 cents last year.

The context: Australia’s top winemaker has been battling a slowdown in consumer spending in key global markets and had warned of deteriorating conditions in May. While its lower end products have been affected, CEO Tim Ford on Tuesday said consumer demand for premium wine is expected to stay consistent over the next year.

What they said: “We enter F24 with confidence that the execution of our premiumisation strategy will continue to deliver our long-term growth ambitions through the cycle. We are a much stronger business today and are well placed to succeed in the current macro-environment where consumer demand for Luxury wine is strong and Premium wine remains resilient.” - Treasury Wines CEO Tim Ford.