Penfolds and Daou owner Treasury Wine Estates today (3 June) lowered its forecast for a closely-watched profit metric amid pressure on US sales.
The Australian wine group said it expects its EBITS to be around A$770m in the financial year ending 30 June.
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Treasury Wine Estates’ previous forecast was for EBITS to be “approximately $780m”, itself reset in February.
The company said the new guidance was “driven by lower-than-expected premium portfolio shipments in the US”.
The Wolf Blass owner said “economic uncertainty and weaker consumer demand” in the US has hit the performance of the “wine category … at price points below US$15”.
In a brief stock-exchange filing, Treasury Wine Estates provided a short statement on the decision by its distributor in California, Republic National Distributing Company (RNDC), to quit the Golden State in September.
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By GlobalDataIn the first half of the company’s financial year, its sales through RNDC in California accounted for around 25% of the net sales revenue from its Americas division and approximately 10% of group net sales revenue.
The group said RNDC’s move would not affect its financial results in its current financial year.
However, Treasury Wine Estates added: “TWE has begun evaluating alternative distribution arrangements for its portfolio in California to determine an appropriate path forward.
“TWE’s relationship with RNDC spans 25 US states, including California. The closure of RNDC’s California operations is not expected to impact the remainder of its business, and RNDC has reiterated its commitment to investing behind and driving TWE’s portfolio in the remaining 24 states.”
Shares in Treasury Wine Estates closed up 0.49% at A$8.14.
In October, Sam Fischer, chief executive at Australia-based beer and spirits group Lion, will become Treasury Wine Estates’ new CEO and managing director.
Fischer will succeed outgoing CEO Tim Ford, who took up the role in 2020.
