Treasury Wine Estates (ASX:TWE) have reduced their guidance for the 2019-20 financial year mainly due to underperformance in the US markets.
The company now expects reported EBITS (Earnings Before Interest, Tax and the agricultural accounting standard SGARA) growth of 5 per cent to 10 per cent in the 2019-20 financial year.
This is down from earlier guidance of 15-20 per cent growth.
CEO Michael Clarke says they have looked at whether they can recover this first half shortfall in the second half, but given the continued market dynamics in the US, they believe that those aggressive one-off recovery activities, for example pricing, would not be repeatable in F21.
Recent drought, heat and fires in Australia have created some likely challenges with respect to the cost of the 2020 Australian vintage, which is currently in harvest.
Despite this Treasury Wine Estates (ASX:TWE) delivers growth with first half 2020 NPAT up 5 per cent.
Shares in Treasury Wine Estates (ASX:TWE) closed 5.8 per cent lower to $16.68 yesterday.