Victoriously to Phandalan
Having defeated Glasstaff, apparent-leader of the Redbrand mercenaries (and perhaps a bit worse for wear), the group made the short trip through the remainder of the woods, before stepping back into the town.
You've made it back to the town, now it's up to you to figure out what to do from here.
Keep in mind, you're carrying a recognizable staff into a town that's semi-taken over by Redbrands.