Treasury Wine Estates has followed a review of the outlook for wine in the US with a pending impairment charge on its operations in the country.
The revised valuation, which applies across the Treasury Americas and Treasury Collective business units, is the result of a forecast “reduction in future cash flows in the Americas business of 11% per annum”. The sum of the charge – effectively a right-sizing of the value of a business based in part on future expectations – will absorb “at least all goodwill” (AUD687.4m [US$449.8m] at the end of June this year) in the two divisions.
The final non-cash charge will be confirmed alongside Treasury’s results for the six months to the end of December (H1 of its fiscal 2026) early next year.
“While a number of Treasury’s larger brands continue to grow ahead of market – including Daou, Frank Family Vineyards and Matua – in response to further moderation in US wine category trends, Treasury has applied more conservative long-term market growth assumptions, resulting in reduced long-term earnings growth rates,” the group said in a filing to the Australian Securities Exchange today (1 December).
In figures for the 12 months to the end of June, the company saw total sales climb by 6.1% on the corresponding period a year earlier, although the figures were skewed slightly by the acquisition of California’s Daou Vineyards business in late 2023.
The results were also the last for Tim Ford, who vacated the CEO position to be replaced by former Kirin Group and Diageo executive Sam Fischer at the end of September.
