Aug 13 (Reuters) – Australia’s Treasury Wine Estates swung to an annual loss on Thursday after writedowns in its U.S. business and said it expects 2027 earnings to be at least in line with the prior year, sending its shares lower in volatile trade.
The Penfolds owner reported a statutory net loss attributable to shareholders of A$1.08 billion ($762.37 million)for the year ended June 30, versus a profit of A$436.9 million a year earlier. Revenue dropped 12.2% to A$2.63 billion.
The loss followed an A$1.12 billion impairment of U.S. assets and an A$611.3 million charge tied to a strategic review of its Americas business and supply chain changes.
Shares of Treasury Wine whipsawed in early trading, jumping 6.4% to A$5.85 shortly after the results before falling 2.4% to A$5.37.
The global wine industry has been grappling with shifting consumer preferences, softer demand and a supply glut across several markets, prompting winemakers to cut inventories and streamline operations.
Treasury Wine’s Americas business has been a major drag on earnings as weak U.S. demand and distribution disruptions left the company with excess inventory, prompting a restructuring of the division and a broader review of operations.
Earnings before interest, tax, self-generating and regenerating assets and material items (EBITS) from the Americas division fell 61.4% to A$90.2 million from A$233.4 million a year earlier.
The winemaker cited softer U.S. market conditions, disruption from its California distribution transition and inventory rebalancing efforts.
Demand for the Penfolds brand remained resilient in key markets, with volumes sold to retailers rising 34.7% in China and 18.1% in Asia excluding China.
However, revenue from Treasury Wine’s flagship luxury wine brand fell as the company reduced customer inventories and restricted shipments that were contributing to parallel imports into China instead of authorised distribution channels.
($1 = 1.4166 Australian dollars)
(Reporting by Roshan Thomas and Sneha Kumar in Bengaluru; Editing by Diti Pujara and Subhranshu Sahu)
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