(Bloomberg) — Treasury Wine Estates, maker of the Penfolds brand, pointed to robust demand for fine wines in Asia and the United States and signaled further restructuring of the business following a strategic review.
The Australian winery is focused on becoming a premium wine company, Chief Executive Tim Ford said in an investors call after the company released its full-year results, adding that more than 75% of its revenue already comes from premium brands.
Treasury’s luxury category includes wines with a retail price of A$30 (US$20) or more, such as Penfolds Bin and Icon, Wynns and California’s DAOU. Premium is priced between A$10 and A$30, while commercial brands are priced under A$10.
The company hinted at further restructuring on Thursday, saying it plans to combine its Treasury Premium Brands business with Treasury Americas Premium by July 1, 2025. This follows announcing plans last week to sell its commercial brands portfolio, which includes Wolf Blass and Yellowglen.
A wine glut has been exacerbated by a sluggish economy, changing drinking habits and punitive Chinese tariffs, but demand for premium spirits remains strong, with consumption strong in Hong Kong, Thailand, Taiwan, the United States and China, the Treasury said in an earnings release.
“I visited China last week and saw first-hand the excitement and buzz around the return of Penfolds’ Australian portfolio to the market,” Tom King, the brand’s managing director, said on a conference call on Thursday.
Government bonds rose as much as 2.6 percent in Sydney before paring gains to settle around 12 AUD. The company now expects 2025 profits of A$780 million to A$810 million, better than expected.
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