Net sales revenue for Penfolds in America grew by 37.9 per cent and sales in Europe,the Middle East and Africa (EMEA) increased by 15.4 per cent.
As part of its US strategy,theAustralian winemaker has partnered with gangsta rapper Snoop Dogg and most recently Martha Stewart to sell ‘Cali Red’ and ‘Martha’s Chard’ under its 19 Crimes wine label,which is popular in the US.
Mr Ford hinted that the company was looking to strike up another high-profile partnership,but wouldn’t reveal whether this would involve an Australian celebrity.
Mr Ford made his comments after the winemaker on Wednesday reported a 7.5 per cent fall in net income to $109.1 million for the six months of its 2022 financial year. Earnings before interest and taxes dropped 6.7 per cent to $262.4 million.
Mr Ford said he was “very pleased” with the company’s performance in the December half given the “effective closure” of the mainland Chinese market. Earnings before tax and interest grew 28 per cent outside China,he pointed out.
While Penfolds’ earnings before interest and taxes slid by 17.4 per cent to $165.1 million,the Treasury Americas and Treasury Premium Brands divisions saw earnings before interest and taxes rise 26.9 per cent and 20.7 per cent,respectively.
‘Better than feared’
Investors reacted positively to the result,sending the company’s share price 11.7 per cent higher to $11.77.
Jarden analyst Ben Gilbert said it was a “strong result that should give the market confidence in[the company’s] ability to position the business to deliver higher sustained returns”.
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“This,coupled with[the] shift to luxury[pricing power] in an inflationary backdrop,should see Treasury Wines do well from here,” he wrote in a note to clients.
Investment bank Barrenjoey analysts described Penfolds’ earnings as “better than we feared”,while analysts at research platform MST Marquee said Penfolds’ underlying performance was “solid”.
While Penfolds’ China woes were weighing on the result,Mr Ford said that all three company divisions were on a “clear and positive trajectory” towards long-term growth targets. “We have shifted our focus from a mindset of ‘recovery and restructuring’ to one of ‘growth and innovation’.
“We have great confidence that by leveraging the unique strengths of our businesses - our people,our brand and our asset base - we are well-placed to capitalise on the significant opportunities across the global markets in which we operate.”
The winemaker,which late last year said it waspreparing to increase prices amid inflationary pressures,signalled again that further price rises were ahead.
“Supply chain and logistics costs are expected to remain elevated in[the second half of 2022],with price increases to be implemented across select portfolio brands to partly mitigate impacts,” the company said in its trading update to the ASX.
Treasury Wines maintained a fully franked interim dividend of 15 cents per share.
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