Treasury Wine Estates faces China growth concerns | Australian Markets

There are “cracks appearing” in Treasury Wine Estates’ China prospects, analysts say, as shopper preferences shift from giant banquets to lifestyle-oriented events.

Unveiling its full-year outcomes on Wednesday, Australia’s high wine producer flagged a latest shift in alcohol consumption behaviour in China, with much less large-scale banqueting and more smaller scale event occasions.

Citi analyst Sam Teeger warned this didn’t “bode well” for the remaining of the new financial 12 months, with Barrenjoey’s Tom Kierath anticipating the China commentary to weigh on TWE’s shares on Wednesday.

However, the stock was up 3.5 per cent in early trade earlier than easing back to close at $7.72, up 1.18 per cent.

TWE mentioned full-year internet revenue earlier than materials gadgets was 15.5 per cent greater than the earlier financial 12 months at $470.6 million.

Earnings grew 17 per cent to $770.3m, pushed by its high-end Penfolds label and a full 12 months contribution from its Californian wine operation DAOU. It additionally introduced a share buyback of up to $200m.

Penfolds division earnings rose 13 per cent to $477m, pushed by robust growth in its Bin and Icon shipments to China.

Outgoing chief government Tim Ford mentioned it “continued to face headwinds in a number of markets”.

Penfolds managing director Tom King later advised analysts on a call it had robust plans for the mid-autumn pageant in China in October and was “feeling pretty good around how the initial collection release has gone down in China”.

“I think we’ve proven over recent years that we’re pretty good at adapting to shifting environments,” he mentioned.

“China is a very dynamic market for sure and things can change very quickly.

“We’ve got levers that we can pull as demand increases and decreases across our global business.”