Treasury Wine shares drop after earnings warning
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More news: Shares in Treasury Wine Estates have dropped nearly 4% to $10.72 after Australia’s top winemaker reported a 33% lift in first-half profit but cut full-year guidance on weaker performance of its commercial wines portfolio.
It now expects full-year earnings to be at the lower end of its $780 million to $810 million guidance range.
E&P retail analyst Phillip Kimber said the result was 'mixed'.
What they said: "Whilst it provided new guidance (at the bottom end of its previous range), the composition suggests strong rebound is required in both Treasury Americas and Treasury Premium Brands," Kimber said in a note.
"We expect VA consensus forecasts to fall 2-5% in FY25. We note increased synergies for DAOU commencing from FY26 will help offset some of the flow on impact in FY26."
Treasury Wine lifts half-year profit, cuts FY guidance
The news: Treasury Wine Estates has lifted first-half profit by nearly a third on the back of improved earnings from its luxury portfolio but cut full-year guidance on weaker performance of commercial wines.
The numbers: Australia’s top winemaker reported a 32.5% increase in first-half net profit to $220.9 million, while revenue also jumped 19.6% to $1.57 billion. Earnings rose 35% to $391.4 million.
It will pay an interim dividend of 20 cents per share, up from 17 cents a year ago.
The context: Treasury said the growth in earnings and profits was driven by rising sales for its flagship Penfolds luxury wine and the recently acquired DAOU wine business in the US, where synergies will now be higher than previously expected.
The winemaker, which gets three-quarters of its earnings from high-end wines like Penfolds, has benefited from the reopening of the Chinese market last year following the end of tariffs on Australian wine.
However, the company expects full-year earnings to now be at the lower end of its $780 million to $810 million guidance range, primarily due to reduced expectations for its cheaper commercial brands.
The winemaker said it will reverse plans to divest the commercial brands portfolio after concluding that offers did not represent compelling value.
The source: ASX announcement
