• Softening China market impacting Penfolds performance
• California distribution transition impacting Treasury Americas
• Uncertainty around RNDC settlement leads to withdrawal of FY26 guidance

TWE has provided an update on its performance expectations for FY26, highlighting several key developments. For Penfolds, first quarter shipments were in line with expectations, but the company has seen softness in depletions in the China market due to evolving consumption dynamics in the alcohol sector. As a result, TWE no longer believes it is appropriate to retain the previous guidance for low to mid double-digit EBITS growth in FY26 and approximately 15% EBITS growth in FY27 for Penfolds. In Treasury Americas, the luxury brand portfolio is performing well outside of California, with depletions growing ahead of the luxury category. However, first quarter depletions were impacted by the distributor transition in California, as expected. TWE had previously noted that the expectation for modest EBITS growth in FY26 for Treasury Americas was contingent on mitigating the impact of reduced shipments in California through negotiations with RNDC, who was the incumbent distributor in the state and had announced the closure of their operations. Due to the increased uncertainty around the settlement with RNDC, TWE no longer believes it is appropriate to retain the guidance for modest EBITS growth in FY26. As a result of these developments, TWE is not in a position to provide updated FY26 Group expectations at this time.

TWE remains very confident in the long-term growth potential for Penfolds in China and globally, and will actively pursue opportunities to re-allocate product to other markets, but with caution to ensure it doesn't increase the risk of parallel imports into the China market.