Tonnellerie Francois Freres shares fall 7% on Q1 revenue drop, U.S. destocking

French oak barrel manufacturer Tonnellerie Francois Freres (TFF) saw its shares plummet 7.7% on Wednesday, before settling 2.1% lower at €15.72. This sharp decline came after the company reported a staggering 36.4% year-over-year revenue drop to €56.9 million in the first quarter. The primary culprit was destocking and a drop in demand for bourbon in the United States, with the bourbon division alone experiencing a 46% decline at the start of the fiscal year.

Sluggish distillery closures further hampered deliveries, contributing to a 41.2% revenue decline for TFF's alcohol division, which fell to €21.9 million. Wine division revenue also took a hit, dropping 32.9% to €35 million, primarily due to weak U.S. demand driven by a low dollar and excess inventory. Looking ahead, TFF anticipates another year of decline in 2026 and 2027, largely due to a projected drop in European wine harvest volumes following extreme heat and drought in the summer.

However, the company expects the downward trend to reverse by 2028. TFF also announced plans to launch "TFF Upcycling," a new subsidiary focused on collecting, processing, and selling used barrels from wine estates, as part of its vertical integration strategy. The company generated €312.7 million in revenue, with an EBITDA of €48.2 million, and employed 1,255 people across 80 countries.

The next significant update will come in the form of TFF's half-year results, scheduled for January 6, 2027.