BMI Not Too Optimistic On TWE's Near-Term Growth

Australian wine producer Treasury Wine Estates (TWE) reported a 7.0% decline in its net sales revenue, on a pro-forma basis, for the year ending June 2011. TWE's volume sales continue to be pressured by challenging demand conditions in the Europe, Middle East and Africa (EMEA) region as well as in the Americas, which saw the company's volumes decline by 6.6% year-on-year (y-o-y), on a pro-forma basis, for FY2011 (end June). Demand conditions will only get more challenging in the US, Europe, Australia and New Zealand, suggesting that TWE's headline growth is likely to come under greater pressure over the coming quarters. Asia, on the other hand, should remain a relatively bright spot to support TWE's headline growth.

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