Treasury Wine Estates (TWE) Chairman John Mullen has told shareholders at the company’s annual general meeting that the business remains well positioned for the years ahead, underpinned by a strong balance sheet, world-class assets and exceptional people.
Mullen told the AGM that TWE is entering the new financial year with a renewed focus on brand strength, disciplined execution and its long-term luxury strategy, despite the challenges in China and the United States leading the business to withdraw its earnings guidance earlier this week.
“TWE’s new operating model came into effect on the first of July. Our strategic focus under this model is clear: two outstanding luxury brand divisions, Penfolds and Treasury Americas, complemented by Treasury Collective, our new global division that combines Treasury Premium Brands and Treasury Americas Premium portfolio brands,” Mullen said.
The company’s new structure is designed to sharpen its focus on luxury growth and global execution, with Penfolds and Treasury Americas positioned as flagships within the portfolio. Mullen said that while trading conditions have been uneven across some markets, TWE’s brands continue to perform well in core and emerging regions.
“For Penfolds, first quarter shipments were in line with expectations, coming off the back of another successful Penfolds Collection release in August that was very well received by customers and consumers in our key markets globally,” he said.
Although softer consumer trends in China have affected sales, Mullen emphasised that Penfolds’ performance elsewhere remains robust. “It is important to note that Penfolds depletions performance has been very positive of late, as evidenced by the growth in FY25 in Asia (excluding China), in Australia and in EMEA. We remain very confident in the long-term growth potential for Penfolds in China and globally.”
In North America, the company continues to build its luxury credentials, with Treasury Americas’ high-end portfolio, which includes DAOU, Frank Family Vineyards and Stags’ Leap, outperforming the broader luxury wine category.
“The Luxury brand portfolio is performing well outside of California, with depletions growing ahead of the Luxury category, up more than 5% in the first quarter,” Mullen said.
Shareholders were told that TWE’s leadership remains focused on ensuring operational stability as it works through a distributor transition in California and evolving demand patterns in China. Mullen said the company would continue to take a measured approach to managing inventory and reallocating product to other growth markets, “with caution to ensure that it doesn’t increase the risk of parallel imports into the China market.”
While the company has paused its on-market share buyback until trading conditions become clearer, Mullen said TWE’s financial footing remains strong.
“This is a prudent course of action under these circumstances, noting that TWE retains a strong and flexible capital structure to navigate the current environment and deliver on its strategic priorities,” he said.
Mullen closed the AGM with a message of reassurance and optimism about the path ahead.
“While near-term our business has been impacted by disruptions in two of our key markets, we are taking the appropriate actions to mitigate their impact,” he said.
“Importantly, against a backdrop of difficult economic conditions in the wine industry, TWE’s long-term fundamentals remain strong: we have a strong balance sheet, world-class brands and assets, exceptional people, and a clear long-term strategy built around luxury leadership and disciplined execution which underpins our confidence in our future.”