(Reuters) -Shares of Treasury Wine Estates slumped on Monday to their lowest point in more than 10 years after the Australian winemaker suspended its A$200 million ($130.02 million) share buyback plan and withdrew EBITS growth outlook for fiscal 2026. The decision comes in response to an uncertain outlook for its flagship Penfolds business in China, […]
Business
Treasury Wine sinks to decade-low after buyback halt, withdrawal of 2026 profit forecast
Audio By Carbonatix
(Reuters) -Shares of Treasury Wine Estates slumped on Monday to their lowest point in more than 10 years after the Australian winemaker suspended its A$200 million ($130.02 million) share buyback plan and withdrew EBITS growth outlook for fiscal 2026.
The decision comes in response to an uncertain outlook for its flagship Penfolds business in China, as well as challenges facing its Treasury Americas portfolios.
Treasury Wine, the country’s largest standalone winemaker, had earlier 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.
Shares of the firm fell as much as 14.2% to A$5.99 by 2310 GMT, hitting their lowest level since September 2015.
The firm noted that depletion for its Penfolds business “remains weak relative to plan”, with the firm now no longer retaining its forecast for the same for low- to mid-double-digit EBITS growth in fiscal 2026 and approximately 15% EBITS growth in fiscal 2027.
In its Treasury Americas portfolio, depletions were impacted by the closure of Republic National Distribution Company’s (RNDC) operations in California, which was the company’s incumbent distributor.
While the firm looks to mitigate the full impact to fiscal 2026 EBITS associated with RNDC’s closure, it still flagged increased uncertainty of its occurrence, thereby withdrawing its forecast for the segment.
Similarly, given the uncertain outlook around trading conditions and expectations, Treasury Wine said it is prudent to pause the buyback until greater clarity is available.
“Several initiatives are now being implemented to mitigate the expected impacts in China in F26, including pursuing opportunities to re-allocate product to select customers in other key markets in a manner that is sustainable and minimises the risk of parallel imports back into the China market,” the winemaker added in its statement.
($1 = 1.5382 Australian dollars)
(Reporting by Shivangi Lahiri in Bengaluru; Editing by David Gregorio, Diane Craft and Sherry Jacob-Phillips)