Treasury Wine Estates Shares Plunge 14 Percent After Withdrawing 2026 Earnings Guidance Amid China, US Setbacks

Shares of Treasury Wine Estates, one of the world’s largest wine producers, fell sharply on Monday after the company withdrew its earnings guidance for 2026 and paused a major share buyback program. The Melbourne-based company cited disappointing sales of its flagship Penfolds wines in China and ongoing distribution problems in the United States as the main reasons for the move. Treasury’s stock dropped 14 percent to A$5.99, reaching its lowest level in more than a decade.

The company said that sales of Penfolds in China have not met expectations. Treasury pointed to changing drinking habits in the country, including a decline in large banqueting events where premium wines are often served. China has been a key market for Treasury since Beijing lifted heavy import tariffs earlier this year, ending more than three years of restrictions that had kept Penfolds off Chinese shelves. However, Treasury now says that if current trends continue, it is unlikely to meet its sales targets for Penfolds in China for the 2026 financial year.

As a result, Treasury has withdrawn its previous guidance for low- to mid-double-digit earnings growth for Penfolds in 2026 and 15 percent growth in 2027. The company also pulled its group-wide earnings forecast for 2026. Analysts say the decision reflects the high level of uncertainty in the Chinese market. Michael Toner, an analyst at RBC Capital Markets, said the complete withdrawal of guidance for Penfolds highlights the challenges caused by changing consumption patterns in China.

In the United States, Treasury’s business has been disrupted by the exit of its distributor in California, Republic National Distributing Company (RNDC). The company is now transitioning to a new partner, Breakthru Beverage Group. Treasury estimates that this change will cost about A$50 million in sales and is still negotiating over roughly A$100 million worth of inventory held by RNDC.

The company also announced it would pause a planned A$200 million share buyback program that was first revealed in August. So far, Treasury has repurchased about A$30 million of shares. Analysts described the decision to halt the buyback as unexpected but reasonable given the current uncertainty in its key markets.

To address the weaker demand in China, Treasury said it is working on several initiatives for the year ending June 2026. These include efforts to re-allocate Penfolds products to select customers in other important markets. The company did not provide further details on which markets might benefit from this reallocation or how it plans to boost sales outside China.

Treasury Wine Estates is one of Australia’s most prominent wine exporters and is known globally for its Penfolds brand. The company’s recent challenges highlight the risks faced by international wine producers as they navigate shifting consumer preferences and complex distribution networks in major markets like China and the United States.