Treasury Wine Estates (TWE) has highlighted early momentum in its transformation agenda at its Annual General Meeting, with positive performance in Q1 FY27.
CEO Sam Fischer (above) said: “We’ve taken decisive action over the past year to sharpen our focus on where we compete, the brands weinvest in, and how we operate. We’re already seeing stronger sales across our priority brands in key markets, and we’re determined to build on that progress.
“We’re optimistic about the long-term opportunity in the global wine category. We have some of the strongest brands in the world, from Penfolds and Matua to regional standouts like Wynns, Pepperjack, and Frank Family Vineyards. We’ll be investing more in them so they can reach their full potential with wine drinkers in established and emerging markets.”
Positive first quarter trading trends included:
- China: Penfolds depletions growth slightly ahead of plan, supported by strong consumer demand.
- US: Stronger depletions growth across Power Brands, led by DAOU and Matua and Regional Heroes.
- Australia: Depletions growth across Power Brands, led by Penfolds.
“Penfolds has built a reputation in China that extends well beyond wine – it’s recognised as a true luxury brand. We see significant opportunity to build on that strength, reaching more consumers, expanding our distribution and making Penfolds part of more occasions,” Fischer said.
“A highlight [in Australia] was the outperformance of the Penfolds portfolio in independent retail. Improving performance in our home market is a priority, and we’ve made a positive start in the quarter.”
In the US, TWE’s luxury wine portfolio has recorded three consecutive quarters of depletions growth, led by brands including DAOU and Frank Family Vineyards.
The conclusion of the first quarter also marks the transition to a new regional model, which TWE said had simplified operations and created clearer accountability in each market.
Brand sales continue apace
TWE said it had also made progress on the sale of non-priority brands and assets, including Seppelt, Rosemount and vineyards, with approximately $50 million in proceeds confirmed to date.
These divestments complement the realisation of $40 million in cost benefits in FY27 as part of the Ascent transformation program, which is on track to realise $100 million in annual cost reductions by FY29.
“We’re also finalising a number of additional divestments, which we expect to have signed by the end of the first half,” Fischer said.
TWE also reiterated its F2Y7 earnings guidance, with EBITS expected to be at least equivalent to FY6, and its long-term EBITS margin target of 25%+.
TWE Chair John Mullen said: “We look to the future with great confidence. Wine has an enduring place in celebrations, shared experiences and everyday moments across cultures and generations.
“We remain confident that consumers will continue to seek distinctive, luxury wine experiences – and our focused portfolio, driven by our power brands and regional heroes, is well placed to capitalise on this demand over the long term.”
Fischer said: “As I mark my first year leading this business, I’m energised by the opportunity ahead. We have a portfolio of extraordinary brands, a team of talented people and the right strategy to unlock growth.”