Australia’s Treasury Wine Jumps on US Dispute Settlement, Earnings Forecast Hike
Treasury Wine Estates shares rose over 8% after settling a dispute with a US distributor and raising its earnings forecast.Summary
Australia’s Treasury Wine Estates (TWE.AX) saw its shares jump more than 8% on Tuesday following the settlement of a dispute with U.S. distributor Republic National Distributing Company (RNDC) regarding the closure of its California operations. The stock reached A$5.590, marking its largest intraday gain since September 27, 2024. This increase was also supported by a raised earnings forecast for the first half of the year, now projected to be around A$236 million ($167.35 million), up from the previous estimate of A$225 million-A$235 million.
The settlement involves Treasury Wine repurchasing inventory from RNDC at the original sale value, minus a confidential settlement amount to compensate for the impact of the California closure. CEO Sam Fischer acknowledged that RNDC’s exit from California had negatively impacted the company’s first-half performance. Despite these positive developments, Treasury Wine continues to face challenges in China due to changing consumer preferences affecting the depletion of its Penfolds brand.
Following the divestment of several markets by RNDC to Reyes Beverage Group, RNDC’s distribution is expected to account for less than 20% of Treasury Americas’ net sales revenue.
(Source：The Japan News)