Treasury Wines updated segment disclosure and perspectives on FY26e should provide relief that earnings will still grow in FY26e and the Board sees its shares as under-valued. The new segmentation shines a very bright light on the appeal of luxury wines and the challenge in commercial wines. Luxury wines accounts for 23% of Treasury’s volume and 86% of the group’s earnings. While the outlook for FY26e has been tempered a little, there are downside risks in Chinese demand and US distribution changes in our view.

Treasury Wines has provided an update on FY25e earnings and noted that its US distributor in California will exit the state. The loss of RNDC will be a short-term risk given the short-term timeframe of September 2025. We have a cautious outlook on the US business with EBITS ex DAOU down 24% in FY26e.

Treasury Wine’s share price suggests there is downside risks to consensus earnings. We agree and the opportunity for incoming CEO Sam Fischer will be a reset of expectations because the fundamentals of the business are solid. Treasury has repositioned its portfolio towards luxury wines where Chinese and global demand are both strong.