(Updates with the stock movement in the headline and last paragraph.)
Treasury Wine Estates (ASX:TWE) expects to recognize an additional AU$558.4 million post-tax material item charge in fiscal 2026, relating to the non-cash write-down of US-based assets and a further impairment of brands, as part of key initiatives to rebalance its US supply chain, according to a Monday Australian bourse filing.
The company said the actions include reducing North Coast vintage make sizes starting this year, and a write-down of inventory predominantly consisting of bulk wine to be managed through sale into bulk wine markets and internal reclassification.
Treasury Wine Estates will also recognize a write-down to brands, predominantly DAOU, Frank Family Vineyards, and Beaulieu Vineyard, as a result of a review of June 30 asset carrying values, the filing added.
The company said unaudited earnings before interest, tax, SGARA and material items (EBITS) for fiscal 2026 are expected to be AU$492.3 million, ahead of its AU$480 million to AU$490 million guidance range, driven by Penfolds, with leverage expected to peak in fiscal 2026 at 2.8 times, ahead of guidance of 2.9 times, while reiterating its expectation for fiscal 2027 EBITS to be at least equivalent to fiscal 2026.
Treasury Wine Estates shares gained nearly 4% in recent Monday trade.