Treasury Wine Estates (ASX: TWE) shares plummeted to a new 10-year low, driven by weaker sales in China and distribution challenges in the United States, leading the company to withdraw its earnings guidance and halt its share buyback program. The developments have shaken market confidence in the wine giant’s near-term prospects.
The stock closed at A$5.65 on the ASX, a 0.53% decline on the day, marking a new decade low. Year-to-date, TWE shares have fallen by a significant -50.13%, reflecting the substantial headwinds the company is currently facing. The steady decline throughout the year indicates sustained selling pressure with bulls struggling to find support.
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Treasury Wine Estates has withdrawn its earnings guidance for the 2026 financial year and paused its A$200 million share buyback program. This decision was triggered by lower-than-expected sales of Penfolds wines in China and disruptions in its U.S. distribution network. The company anticipates approximately A$50 million in lost sales in the U.S. due to the transition to a new distributor, Breakthru Beverage Group, from Republic National Distributing Company (RNDC), with ongoing negotiations concerning A$100 million worth of inventory held by RNDC.
The anticipated rebound in Penfolds sales in China, following the lifting of import tariffs, has not materialized due to evolving consumer habits, including a decrease in large-scale banqueting. The company has indicated that if current trends persist, it is unlikely to meet its sales targets for Penfolds in China for the 2026 financial year.
RBC Capital Markets analyst Michael Toner noted the uncertainty, stating that the complete withdrawal of guidance for Penfolds highlights the challenges posed by evolving consumption dynamics in the Chinese market. He also viewed the pause on the share buyback as a prudent move given near-term trading uncertainties.
The near-term outlook for Treasury Wine Estates remains uncertain. While the company had previously reported strong earnings growth driven by Penfolds and its Treasury Americas portfolio, the recent challenges in key markets have significantly impacted its financial performance and market sentiment. The company’s ability to navigate these headwinds and restore growth in China and the U.S. will be crucial in determining its future trajectory.
