Treasury Wine profits surge as Penfolds booms in China
Treasury Wine Estates has posted a 16% rise in annual underlying profit, driven by strong Penfolds sales in China and solid performance in its US arm. The company also benefited from its Daou integration, though challenges remain in some markets.
The 2025 full-year underlying net profit after tax was AU$470.6 million compared with the AU$407.5 million reported last year, marginally below analysts’ predictions. Sales for the full year increased by 7.2% to AU$770.3 million, while net sales revenue per case of AU$138 was 10% higher than in 2024.
As a result, shares in Australia’s biggest wine group jumped by more than 5% overnight in Sydney.
Penfolds growth in China
Operating earnings for the Penfolds flagship range rose 13% for the year, fuelled by strong demand in China following the easing of import tariffs.
The Americas division, headed by Daou, saw net sales increase by 8.2%, generating savings of US$12 million in its first full year under TWE ownership.
Shareholder returns boosted
Treasury marked the improved year by announcing an AU$200 million over the next 12 months to improve shareholder returns.
Partner Content
Not all is rosy at Treasury, however. It pulled out of selling some of its commodity brands during the year because it deemed them worth more than the price offered. Following the falling demand and glut of cheaper Australian wines, the Premium Brands division’s earnings fell by 27.6%.
China outlook uncertain
Treasury also issued a partial caveat about its performance in China as Beijing continues to promote a reduction in banqueting and gifting to officials. That resulted in slower depletion of its Penfolds stock.
Treasury’s managing director of the Penfolds division, Tom King, said a tightening in alcohol policies for government activities in recent months was affecting the market, although it was too early to assess the extent.
“Those occasions are important to us, but it’s very hard for us to quantify the extent,” he said.
“China is a very dynamic market and things can change very quickly. We’ve got levers that we can pull.”
Earnings growth targets
Treasury Wine expects Penfolds operating earnings to grow in the low to mid double-digit range in its new financial year, and it is targeting 15% growth in 2027.
Related news
Treasury Wine Estates hit by major US write-down
Treasury Wine Estates announces earnings boost and share buyback plan
