The Treasury Wine Estates Ltd (ASX: TWE) share price was up more than 1% earlier today in reaction to an ASX announcement.
Treasury Wines is a world-leader in wine making and brand marketing with some 13,000 hectares of vineyards available and around 3,400 employees across 70 countries. Some of more popular brands include Lindeman’s, Penfolds, Pepperjack, Rosemount, Yellowglen and Wolf Blass.
Treasury Wine Estate’s March 2019 Update
Treasury Wine noted the release of the Wine Australia export data for the March 2019 quarter, but warned against using it as a gauge for the Treasury Wine figures because of the structural differences in the company’s business model, the premium mix of Treasury Wine Estate’s portfolio or the variability of its export shipment profile.
For interested readers, Wine Australia said that the total value of Australian wine exports increased by 5% to $2.78 billion in the year March 2019, with the average value per litre rising to $3.41, the highest level since 2009.
Wine Australia Chief Executive Officer Andreas Clark commented on the decline of volume exports by 3% to 814 million litres:
“What we are seeing is a drop in volumes in the lower value categories and this places Australia well as the global consumer premiumises and drinks less but more expensive wines.”
Looking again at the Treasury Wine Estates ASX release, the company said the establishment of its Shanghai warehouse in the first half of FY19 means selected trade export and import data points do not have a direct relationship to the company’s sales performance.
Treasury Wine Estates said it was pleased with its performance for the nine months to March 2019 and it confirmed continued positive momentum in Asia.
The company also confirmed expectations communicated during reporting season that the Australian 2019 vintage is a very strong and high-quality vintage with ‘Luxury’ intake approximately 10% higher due to the multi-regional sourcing strategy.
Most importantly, Treasury Wine Estates reiterated its guidance for EBITS growth of around 25% in FY19 (click here to learn what EBIT means) and further growth of 15% to 20% in FY20.
Is The Treasury Wine Estates Share Price A Buy?
Treasury Wine Estates might be one of the better ideas to capture the growth of the Chinese consumer, but it is trading fairly expensively for the projected growth over the next couple of years. The two fast ASX growth shares in the FREE report below could create stronger investment returns over the long term.
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