Background: Treasury Wine Estates (TWE) is one of the world’s biggest winemakers, behind iconic labels like Penfolds, Wolf Blass, Wynns, and 19 Crimes - the wine backed by Snoop D-O-double-G himself.

What happened: TWE just warned of weaker sales in China, due to shifting drinking habits and fewer large-scale banquets (yep, apparently Penfolds was huge in Chinese banquets!). On top of that, TWE's US operations took a hit after it was forced to change distributors in California.

What else: The double whammy forced Treasury Wine Estates to withdraw its profit guidance for the 2026 financial year. Investors didn’t take it well, with shares tumbling 14%, marking their lowest level in the past decade.

What's the key learning?

💡Some investors dislike uncertainty more than bad news. Guidance acts like a company’s public GPS - it helps investors see where the business expects to be in the future. This allows investors to value the company based on its expected future performance.

💡When a company like Treasury Wine Estates suddenly withdraws its earnings guidance, it signals that management isn’t confident about forecasting near-term performance. This uncertainty almost always triggers a drop in share price, just like when Estée Lauder pulled its 2025 guidance and saw shares fall about 21%.

💡While not ideal, withdrawing guidance has become more common this year due to Trump’s proposed tariffs. Ford, General Motors, Mercedes, Volvo, Crocs, Krispy Kreme, Beyond Meat, and Diageo all did the same. So TWE might be taking the short-term pain now to avoid disappointing investors later.