Treasury Wine share price sinks 7% on weak FY25 guidance

The Penfolds owner has released its half year results. What did it report?

| More on:
CA woman sits on her bed wailing and crying with a wine bottle in one hand and a glass in the other.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Treasury Wine Estates Ltd (ASX: TWE) share price is on the move on Thursday.

In morning trade, the wine giant's shares are falling 7% to $10.31.

This follows the release of the company's half year results before the market open.

Treasury Wine share price sinks on half year update

  • Net sales revenue (NSR) up 20.2% to $1,544.2 million
  • NSR per case up 16.4% to $137.5 million
  • EBITS margin up 2.8 percentage points to 25.3%
  • EBITS up 35.1% to $391.4 million
  • Net profit after tax before material items up 31.5% to $239.6 million
  • Interim dividend up 17.6% to 20 cents per share
  • Guidance: Low end of EBITS range

What happened during the half?

For the six months ended 31 December, Treasury Wine reported a 20.2% increase in NSR to $1,544.2 million and a 35.1% increase in EBITS to $391.4 million. The latter is ahead of Goldman Sachs' estimate of 33.3% growth.

This was driven by strong growth from the Penfolds and Treasury Americas businesses, which offset a poor performance from the Treasury Premium Brands business.

Penfolds sales were up 24.4% over the prior corresponding period to $557.4 million and EBITS increased 33.9% to $250.2 million. Management advised that this was driven by strong Bin & Icon portfolio shipments in Asia. This was led by the re-establishment of the Australian COO portfolio in China, where there has been strong demand from customers and encouraging depletions performance.

Treasury Americas' sales were up 42.2% to $631.1 million and EBITS rose 66.9% to $155.3 million. This was driven largely the acquisition of DAOU Vineyards in December 2023.

Treasury Premium Brands reported an 8.6% decline in sales to $355.7 million and a disappointing 49.9% decrease in EBITS to $22.9 million. Management advised that this was driven by continued Commercial and Premium NSR declines, which reflects softness in consumer demand for wine at lower price points and its underperformance relative to the category. In addition, the prior corresponding period included a $9.7 million gain on sale of divested vineyard assets.

In light of its strong profit growth, the Treasury Wine board lifted its 70% franked interim dividend by 17.6% to 20 cents per share. This represents a payout ratio of 68%.

Management commentary

Commenting on the half year result, Treasury Wine's CEO, Tim Ford, said:

Our interim 2025 performance highlights the benefit to the quality of earnings and key metrics from our multiyear transformation to a Luxury-led business, with this segment of the market continuing to be healthy in our key trading regions. We are extremely pleased to have successfully re-established the Penfolds Australian country of origin portfolio in China, with positive consumer and customer sentiment and key performance signals very clear.

The progress we have made integrating DAOU and Treasury Americas to create the leading supplier of Luxury wine in the US market is also pleasing and we look forward to further capitalising on this opportunity in the year ahead. Calendar year 2024 has been a year of significant and successful change for TWE. Our team has absolute clarity on our portfolio and execution priorities, with Penfolds and the Treasury Americas Luxury businesses the clear drivers of our future growth, with our global premium business playing a critical role to power and support this growth agenda.

Guidance

Treasury Wine advised that it expects EBITS of approximately $780 million for FY 2025. This is at the low end of its previously guided range of $780 million to $810 million, driven primarily by reduced expectations for Treasury Premium Brands.

This appears to have disappointed investors and put significant pressure on the Treasury Wines share price today.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the 'five best ASX stocks' for investors to buy right now. We believe these stocks are trading at attractive prices and Scott thinks they could be great buys right now...

See The 5 Stocks *Returns as of 30 April 2025

Motley Fool contributor James Mickleboro has positions in Treasury Wine Estates. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. The Motley Fool Australia has recommended Treasury Wine Estates. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Earnings Results

A woman looks up at a plane flying in the sky with arms outstretched as the Flight Centre share price surges
Earnings Results

Up 78% since April, why is the Webjet share price taking off again today?

Webjet shares have soared 78% since 4 April and are lifting off again today. But why?

Read more »

a woman holds her hands to her temples as she sits in front of a computer screen with a concerned look on her face.
Industrials Shares

Guess which ASX 200 stock is crashing 24% on results day

Investors were not impressed with this result. But why?

Read more »

A man in full American NFL playing kit crouches over with his arms across his chest in a defensive stance against a dark background.
Technology Shares

ASX 300 tech stock charges 7% higher to record high on stellar results

This tech stock delivered another impressive result this morning.

Read more »

a group of people sit around a computer in an office environment.
Earnings Results

Guess which ASX 200 tech stock is rocketing 12% on record results

Another half, another record result from this high-quality company.

Read more »

A young man sitting at an outside table uses a card to pay for his online shopping.
Consumer Staples & Discretionary Shares

Why is the Kogan share price crashing 12%?

Profits are down at this ecommerce company during the second half.

Read more »

Frustrated stock trader screaming while looking at mobile phone, symbolising a falling share price.
Resources Shares

Guess which ASX 200 mining stock is sinking 7% following its quarterly update

Let's see how this miner performed during the third quarter.

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Earnings Results

Up 50% in a year, are Xero shares a buy after Thursday's earnings results?

ASX investors reacted positively to Xero’s full-year earnings results on Thursday. Now what?

Read more »

Overjoyed man celebrating success with yes gesture after getting some good news on mobile.
Earnings Results

Xero share price higher despite FY25 earnings miss

The cloud accounting platform provider reported strong top line growth but its earnings fell short of expectations.

Read more »