TWE +16.5%: Rallied strongly after announcing a major restructure alongside a better-than-feared trading update, with improving sales trends helping stabilise sentiment after a difficult year for the company.
- China sales: +40% in the March quarter
- Australasia depletions: +11% y/y
- US depletions: +9.1% y/y
- Penfolds contribution: ~60% of group profits
The key strategic shift is the decision to integrate Penfolds back into the broader group structure, reversing the 2021 move that separated the brand into its own division. CEO Sam Fischer said the previous model added unnecessary complexity and cost, with the business now reorganised along regional lines to improve accountability and generate ~$100mn in annual cost savings.
Operationally, the update highlighted improving sales momentum across most regions, with a strong rebound in China, which has been a huge question mark looming over the business in recent years.
MM is cautiously bullish TWE
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