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Highlights

  • TWE is involved in grapes production and sourcing and wine production, marketing, and distribution
  • In FY23, the company witnessed 1.7% YoY fall in revenue to AUD 2,488.3 million
  • Long-term financial goal of TWE is to maintain sustainable top-line growth and achieve high single-digit average earnings growth

ASX-listed consumer company, Treasury Wine Estates Limited (ASX: TWE) produces and sources grapes. TWE is also engaged in distribution, production and marketing of wine, and manages a portfolio of commercial, premium and luxury wines.

Financial performance of TWE

In the financial year 2023 (FY23), the company recorded revenue of AUD 2,488.3 million, down by 1.7% over FY22. The revenue fell due to decrease in sales volume of Treasury Americas’ premium product line and decrease in sales volume of Treasury premium brands’ commercial portfolio. It was partially offset by an increase in the strong luxury portfolio, especially Penfolds.

In FY23, the company’s NCR per case recorded rise of 12.3%, driven by increase in prices across the brands. During the reported period, EBITS surged by 11.4% YoY to AUD 583.5 million and NPAT grew by 16.6% YoY to AUD 376.1 million.

Key drivers for the consumer sector

As per the data shared by the Australian Bureau of Statistics (ABS), the number of employed people in Australia has increased to 14,246,000 in December 2023, compared to 14,227,200 in November 2023, reflecting a yearly increase of 3%.

As per the data released by ABS on 12 January 2024, the household spending of Australians has increased by 3.1% YoY in November 2023. Black Friday sales boosted discretionary spending in November 2023 as well, just like previous year.

November household spending data and December employment data bode well for consumer sector stocks.

Recent business update

On 10 January 2024, the company announced that 8,576 performance rights were ceased on 28 November 2023 as the conditions related to exercise of the rights were not met.

Outlook

The long-term financial goal of the company is to maintain sustainable top-line growth and deliver high single-digit average earing growth with an EBITS margin of over 25%. The distribution of the firm’s earnings is expected to be biased towards the second half of FY24, with distribution of 55% in the second half.

Share performance of TWE

TEW shares closed 1.75% up at AUD 10.47 apiece on 29 January 2024. Including today’s gain, TWE’s share price has decreased by around 26.53% in the last one year and has declined by nearly 12.57% in the last three months.

The 52-week high of TWE is AUD 14.68, recorded on 1 February 2023, while the 52-week low is AUD 9.98, recorded on 10 January 2024.

Note 1: Past performance is neither an Indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, and currency, is 29 January 2024. The reference data in this report has been partly sourced from REFINITIV.