Is Treasury Wines Strong Guidance the Start of a Sustained Rally?

Source: Kapitales Research

Highlights:

•  Treasury Wine Estates Limited (ASX: TWE) shares jumped nearly 6.70% at the time of writing after the company upgraded its first-half FY26 EBITS outlook, signaling stronger-than-expected trading momentum.
• The company now expects first-half FY26 EBITS of around AU$236 million at the time of writing, modestly above its earlier guidance range, reflecting resilience in its Americas business.
• Treasury Wine reached a settlement with RNDC in California, lowering the expected second-half FY26 net cash outflow to about US$65 million at the time of writing and reducing near-term uncertainty.

Shares Jump on Positive Update

Treasury Wine Estates Limited (ASX: TWE) surprised the market with a strong trading update, sending its shares higher by nearly 6.70% at the time of writing. The rally followed an announcement that the global wine producer now expects first-half FY26 earnings before interest and tax (EBITS) to come in above its earlier guidance range, signaling improving momentum after a challenging period in the US market.

Earnings Guidance Beats Market Expectations

The company lifted its first-half FY26 EBITS expectation to around AU$236 million at the time of writing, exceeding its prior guidance range of AU$225 million to AU$235 million at the time of writing. This upgrade reflects stronger trading conditions since mid-December, particularly across the Americas, where underlying demand trends have proven more resilient than anticipated. The update was viewed positively by investors, as it indicated stabilization following distributor-related disruptions late last year.

RNDC Dispute Reaches Resolution

A key overhang for Treasury Wine had been its long-running issue with Republic National Distributing Company (RNDC) in California. The company announced that it has successfully reached an agreement regarding RNDC's departure from the California market. As part of the agreement, Treasury Wine will repurchase certain inventory, with the net cash outflow now expected to be about US$65 million in the second half of FY26 at the time of writing, lower than earlier estimates. This outcome reduces uncertainty around cash flows and inventory management in the US.

What Are Investors Watching Next?

Investors are now focused on whether Treasury Wine can sustain this improved performance into the second half. Continued depletion growth in the Americas, disciplined inventory management, and clarity around distributor relationships will be critical. With sentiment turning more optimistic, the latest update has repositioned Treasury Wine as one of the more closely watched consumer staples stocks on the ASX in the near term.

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