Treasury Wine profit rises on strong Penfolds demand in China, shares jump
Shares of the country's largest standalone winemaker jumped over 5% in early trade to A$8.06, its highest level in more than two weeks. It was among the top gainers in the ASX 200 benchmark index (.AXJO), opens new tab, which traded largely flat at 0008 GMT.
Treasury Wine reported full-year 2025 underlying net profit after tax of A$470.6 million ($307.2 million), higher than the A$407.5 million reported last year, though it missed Visible Alpha's estimate of A$472.1 million by a whisker.
Operating earnings for its flagship Penfolds brand rose 13% for the year, fuelled by strong demand in China for the iconic label following the easing of steep import tariffs that had kept it off shelves for more than three years.
However, the winemaker flagged a shift in alcohol consumption behaviour in China as large-scale banqueting gives way to smaller-scale occasions, resulting in slower depletion of its Penfolds stock in the key market.
"Our industry research over the year has led us to become more cautious on Neutral-rated Treasury's ability to deliver its Penfolds guidance in FY26 and FY27 due to China weakness," Citi analysts wrote.
"Today's incrementally more cautious tone on this region could lead to some of the China bulls on the stock to moderate their growth expectations."
Treasury Wine forecasts Penfolds operating earnings to grow by low to mid double-digit in fiscal 2026 and is targeting 15% growth in 2027.
Meanwhile, Treasury Americas, which includes both premium and luxury ranges, reported a 34% increase in operating earnings to A$308.6 million, with earnings expected to grow modestly in 2026.
Treasury Wine also announced an on-market share buy-back of up to A$200 million this fiscal year.
Its annual sales revenue climbed more than 7% to A$2.94 billion. It announced a final dividend of 20 Australian cents per share, higher than the 19 Australian cents apiece it paid last year.
($1 = 1.5319 Australian dollars)
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