Treasury Wine Estates Reports A$649.4 Million Loss After Major U.S. Business Write-Down

Treasury Wine Estates, one of Australia’s largest wine producers and the owner of brands such as Penfolds, 19 Crimes, and Daou Vineyards, reported a significant increase in half-year losses after confirming a major impairment on its U.S. business. The company, which suspended its planned dividend, had warned investors in December that it expected to write down the value of its U.S. operations due to more conservative long-term growth forecasts for the American market.

For the six months ending December 31, Treasury Wine Estates recorded a net loss after tax of A$649.4 million, compared to a loss of A$394.4 million in the same period last year. The company booked a non-cash impairment charge totaling A$987.6 million (US$699.5 million) before tax. This included a A$676.1 million write-down to goodwill, A$257.3 million mainly related to its Sterling and Beringer brands, and A$54.2 million linked to inventory.

The group’s earnings before interest, tax, self-generating and regenerating assets, and material items (EBITS) fell 40.3% to A$236.4 million from the previous year. Treasury had previously guided that EBITS would be between A$225 million and A$235 million for the period. Despite coming in slightly above this range, the company cited adverse trends in both the U.S. and Chinese markets as key factors behind the decline.

Net sales revenue dropped 16% to just under A$1.3 billion, with a 16.6% decrease on a constant-currency basis. The company pointed to ongoing challenges in the U.S., including softer market conditions and distribution issues in California, as well as continued headwinds in China due to parallel imports and changes in government spending rules affecting wine purchases for official functions.

Treasury Wine Estates’ CEO Sam Fischer said that while the results reflected current market difficulties, the company was making progress with its transformation program known as TWE Ascent. Announced in December, TWE Ascent is a multi-year initiative aimed at reviewing products, cutting costs, simplifying operations, and sharpening the company’s portfolio.

Fischer stated that key brands continue to perform well with consumers despite broader category declines and that he remains confident in Treasury’s ability to deliver improved performance as it executes its transformation strategy.

The company’s Treasury Americas division saw revenue fall 28.4% to A$283 million due to weaker demand in the U.S. and distribution challenges following Republic National Distributing Company’s exit from California last year—a dispute that was settled last week.

Penfolds, Treasury’s flagship brand and largest division by sales, posted a 10.1% decrease in first-half revenue to A$501.3 million and nearly a 20% drop in pre-tax earnings to $210 million for the second half of 2025.

The slowdown in wine exports to China has been exacerbated by new government restrictions on spending for official events introduced in 2025, which have led to reduced demand for imported wines at public functions.

In response to these pressures, Treasury Wine Estates plans to cut wholesaler holdings in both China and the U.S., aiming to regain control over supply chains and pricing strategies.

The company’s share price fell 5% following Monday’s announcement of results and dividend suspension. Last year shareholders received an interim dividend of 20 cents per share; this year no interim dividend will be paid.

Despite these setbacks, Fischer emphasized that Treasury Wine Estates is focused on building a stronger and more resilient business for the long term through disciplined execution of its transformation program and ongoing efforts to adapt to changing global market conditions.