Investors quickly rewarded Treasury Wine Estates after the group reconfirmed its earnings guidance for FY26 and FY27 at an investor day, sending the stock up sharply. The share price climbed around 10% to $4.53 in morning trade, a strong move for the global wine distributor.
Traders are backing the message that earnings are on track, even as the company continues to work through excess stock in key markets.
The company now pegs FY26 earnings before interest and tax between $480 million and $490 million, giving the market a tighter range to model. It also guides that FY27 EBIT should be at least in line with FY26, signalling stability while inventory is rebalanced in the US and China.
Management lays out a longer-term ambition to push EBIT margins to 25% or higher, pointing to a more profitable mix once current stock issues ease. Revenue growth is only expected to meaningfully resume from FY28, after customer holdings of its wines normalise.
Penfolds inventory held by customers in China has already fallen by about 150,000 cases in FY26, highlighting how aggressively the business is clearing excess stock. Treasury Wine Estates expects that Chinese customer inventory will be fully rebalanced during FY27, setting up cleaner demand signals in that market.
In the Americas division, shipments are planned to broadly track FY26 inventory depletions, deliberately avoiding a new build up of stock. That region is expected to complete its own rebalancing by FY28, leaving the group less exposed to future destocking cycles.
The plan sketched out to investors represents a trade off between short term volume restraint and longer term profitability. By holding the line on earnings guidance now, Treasury Wine Estates is signalling confidence that the inventory clean up will not derail its margin goals.
The detailed timelines for China and the Americas also give analysts clearer milestones to watch as the business works back towards growth from FY28.
