Treasury Wine Estates (ASX:TWE) shares fell as much as 6%t to $5.45 in early trade after the company warned on US earnings and announced a major write-down, before paring losses to trade 4 per cent lower at $5.57 and rank among the three weakest mid-cap stocks.
The maker of Penfolds has cut the carrying value of its Americas business by about $687 million, writing off $687.4 million in goodwill in Treasury Americas and flagging potential impacts to other assets. The non-cash impairment reflects a more conservative long-term view of growth in the US wine market following further moderation in category trends.
The move comes after TWE had previously cautioned investors that an 11 per cent per annum reduction in forecast cash flows from the Americas division over the projection period “would reduce impairment headroom to nil”. While key brands such as DAOU, Frank Family Vineyards and Matua are still growing ahead of the market, TWE has revised its long-term market growth assumptions lower, reducing expected long-term earnings growth rates and pressuring carrying values within its Treasury Americas and Treasury Collective – Americas cash-generating units. The final impairment amount and asset allocation will be confirmed with the 2026 interim results.
Sam Fischer’s recent arrival as chief executive places him immediately in front of significant challenges in TWE’s core markets.
The former Lion boss formally joined the company on October 27, replacing Tim Ford, who spent 14 years with the group, including five years as CEO and managing director. Treasury Wine Estates will hold an investor and analyst conference call in mid-December following Mr Fischer’s commencement.