AUSTRALIA – Treasury Wine Estates (TWE) has warned investors it will record a non-cash impairment charge of at least A$687.4 million (US$450 million) on its US-focused assets due to deteriorating conditions in the American wine market.
The Australian company, owner of Penfolds, Daou, and 19 Crimes, said it has adopted “more conservative long-term market growth assumptions” after observing continued moderation in US wine category trends.
The adjustment will lower expected future earnings growth rates across its Treasury Americas and Treasury Collective divisions.
Treasury Americas oversees TWE’s US-produced brands and regional sales, while Treasury Collective, formerly the premium wine division, houses labels including 19 Crimes, Cali by Snoop, Squealing Pig, and various commercial wines.
The impairment is expected to eliminate all goodwill allocated to the Americas region, totalling at least A$687.4 million (US$449.86M), with potential additional impact on other assets. The final amount and allocation will be confirmed in the company’s fiscal 2026 interim results.
The decision follows TWE’s August annual report, which flagged that an 11 percent annual reduction in projected Americas cash flows would wipe out existing impairment headroom.
In October, the group withdrew its full-year 2026 earnings guidance, citing uncertainty around Penfolds and the Treasury Americas business.
Previously issued targets of low- to mid-double-digit EBITS growth for Penfolds in fiscal 2026 and 15 percent growth in 2027 have also been abandoned.
First-quarter shipments in Treasury Americas were further pressured by the September exit of distributor RNDC from California. TWE had already estimated a A$50 million (US$32.72M) revenue hit for fiscal 2026 from the transition and appointed Breakthru Beverage Group as its new California partner in July.
Although brands such as Daou and Matua continue to outperform the broader market, TWE stated that broader category weakness has necessitated the more cautious financial outlook.
The company indicated it remains unable to provide updated guidance due to ongoing uncertainty in the US operating environment.
The impairment announcement marks another challenge for TWE’s Americas operations, which have faced headwinds from shifting consumer preferences and inventory adjustments across the US wine sector.
Management emphasised that the charge is non-cash and does not affect day-to-day trading, but it underscores the difficult trading conditions persisting in one of the company’s key growth markets.
Sign up HERE to receive our email newsletters with the latest news and insights from Africa and around the world, and follow us on our WhatsApp channel for updates.
Dining and Cooking