Treasury Wine Estates’ first-half result met expectations, according to Jarden analyst Ben Gilbert, however, the suspension of the final dividend came as a surprise to investors. Treasury Wine Estates is a global wine company that owns a portfolio of brands, including Penfolds. It is involved in viticulture, winemaking, and brand marketing, with sales and distribution networks worldwide.
Revenue saw a decrease of approximately 17 per cent, landing at $1.31 billion. Earnings before interest and taxes (EBIT) and net profit aligned with forecasts, indicating stable operational performance. Divisional results showed Penfolds’ EBIT declined by 20 per cent with margins decreasing by 4.8 percentage points. Treasury Collective experienced a 52 per cent decrease but surpassed forecasts, while Treasury Americas marginally exceeded expectations despite a 64 per cent drop in EBIT.
Gilbert noted the company is undergoing significant changes under its new CEO, including cost-reduction and inventory realignment strategies expected to improve performance in the medium term. He added caution regarding the near term due to a stretched balance sheet and weak underlying demand for wine. Treasury Wine Estates has been actively pushing out product to realign excess inventory across Asian markets. The suspension of the dividend, after recently concluding a buyback, has amplified focus on the company’s financial health.
The outlook remains cautious, with FY26 guidance aligning with market expectations. However, the dividend suspension and a strained balance sheet present near-term challenges. Shares in Treasury Wine Estates experienced a decline, last trading down by 4.9 per cent following the announcement.
