TWE Posts 17% EBITS Growth Led by Penfolds and DAOU in FY25
Treasury Wine Estates reported a robust FY25 with luxury labels Penfolds and DAOU leading growth, while announcing a $200 million share buyback and forecasting further earnings gains despite distribution challenges in California.
- Net sales revenue up 7.2% to $2.9 billion
- EBITS increased 17% to $770.3 million, led by Penfolds and DAOU
- Organic sales declined 1.1% due to premium and commercial portfolio softness
- $200 million on-market share buyback announced for FY26
- Californian distributor change expected to reduce FY26 NSR by $50 million
Luxury Brands Power Growth
Treasury Wine Estates (TWE) has delivered a strong full-year 2025 performance, with net sales revenue rising 7.2% to $2.9 billion and earnings before interest, tax, and significant items (EBITS) climbing 17% to $770.3 million. This growth was primarily driven by the luxury portfolio, notably Penfolds and the full-year contribution from DAOU, the Californian winery acquired last year.
Penfolds continued to shine, benefiting from the successful return of its Australian country of origin portfolio to China, alongside robust momentum across other Asian markets. DAOU strengthened its position as the leading luxury wine brand in the US, expanding distribution and delivering value growth nearly three times that of the broader luxury wine market.
Challenges in Premium and Commercial Segments
Despite the luxury segment’s strength, TWE’s organic net sales revenue declined slightly by 1.1%, reflecting softness in the premium and commercial portfolios. Treasury Premium Brands saw a decline in both top-line and earnings, although second-half improvements suggest a potential turnaround. The company’s focus on luxury wines is underscored by its new divisional operating model, which repositions Treasury Americas as a luxury-focused division and establishes Treasury Collective as a global premium brands division.
Capital Management and Shareholder Returns
Financial discipline remains a hallmark of TWE’s strategy. The company reported a net operating cash flow increase of 22.9% and improved leverage to 1.9 times net debt to EBITDAS, comfortably within its target range. Reflecting confidence in its luxury-led growth strategy and financial strength, TWE announced an on-market share buyback program of up to $200 million to be executed progressively through FY26.
Navigating Distribution Changes and Outlook
TWE faces uncertainty from a significant distribution change in California, expected to reduce FY26 net sales revenue by approximately $50 million. The company is actively negotiating exit terms with distributor RNDC and aims to mitigate the impact on earnings. Despite this, TWE forecasts low to mid double-digit EBITS growth in FY26, driven by increased availability of its Bin & Icon portfolio and continued momentum in Asian markets. Penfolds targets approximately 15% EBITS growth in FY27, signaling confidence in sustained luxury segment expansion.
Alongside financial performance, TWE highlighted progress on sustainability initiatives, including achieving 100% renewable electricity globally and advancing gender diversity targets. These efforts complement the company’s long-term strategy to build a resilient, luxury-focused portfolio.
Bottom Line?
TWE’s luxury focus and disciplined capital management position it well for growth, but the Californian distributor shift remains a key watchpoint for investors.
Questions in the middle?
- How will TWE’s negotiations with RNDC resolve the Californian distribution impact?
- Can Treasury Premium Brands reverse its recent earnings decline in FY26?
- What are the implications of TWE’s new divisional model on long-term growth and cost structure?
