Treasury Wine Flags $558.4m F26 Write-Down Charge

Treasury Wine Estates Ltd (ASX:TWE) announced initiatives to rebalance its US supply chain and said that, as a result and incremental to the impairment recognised in 1H26, it expects to recognise an additional $558.4 million post-tax material item charge in its F26 results relating to the non-cash write-down of US-based assets and a further impairment of brands. The company said it will reduce North Coast vintage make sizes commencing 2026, including through the fallowing of vineyards to reduce annual grape intake, with associated asset impairments to reflect lower intended future utilisation across owned and leased vineyards, and will write down inventory, predominantly bulk wine, which it expects to manage through sale into bulk wine markets and internal reclassification. The brand write-down relates predominantly to DAOU, Frank Family Vineyards and Beaulieu Vineyard following a review of 30 June 2026 asset carrying values. The material items comprise $458.6 million for the Ascent transformation program, made up of $229.9 million of property, plant and equipment and right-of-use assets, $137.0 million of assets to be divested, $72.8 million of inventory and $18.9 million of capitalised V26 vintage costs, together with $99.8 million of brand impairment.

Treasury Wine Estates also said its unaudited F26 EBITS before material items are expected to be $492.3 million, ahead of the $480-490 million guidance range provided at its Investor Day on 4 June 2026, which it attributed to Penfolds, and that leverage is expected to peak in F26 at 2.8x compared with Investor Day guidance of 2.9x. The company reiterated its expectation for F27 EBITS to be at least equivalent to F26, with Penfolds outperformance and cost benefits from TWE Ascent offsetting US performance as customer inventory continues to be rebalanced. The operational and strategic review of the Americas remains ongoing, with advisors appointed to support a review of all available options across the Americas brand portfolio, operating model and asset base. The F26 results, which include the material items referenced in the announcement, remain subject to audit by the company's external auditors and are scheduled for release on 13 August 2026.