Treasury Wine shares fall on Americas write-off
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More news: Shares in Treasury Wine Estates lowered in morning trade after flagging a $687 million impairment in its Americas business.
Treasury Wine shares were down 2.1% to $5.70 at 11am AEDT, having dropped more than 6% at the open.
RBC Capital Markets analyst Michael Toner called the announcement "negative", reflecting "increased pessimism" by Treasury Wine in the long-term fundamentals of the Americas market.
Toner said the write-off reinforces the view that the group "materially overpaid" for previously acquired Americas brands.
What they said: "[Treasury Wine] will host an investor and analyst conference in mid-Dec under new CEO Sam Fischer, which we anticipate will highlight material ongoing demand headwinds in the US and China," said Toner.
Treasury Wine flags $687m impairment in US business
The news: Australia's top winemaker Treasury Wine Estates said it expects to recognise a non-cash impairment of its US-based assets, resulting in "at least all" goodwill of $687.4 million currently carried in the Americas business being written off.
The context: Treasury Wine said that while a number of its larger brands continue to grow ahead of the market — including DAOU, Frank Family Vineyards and Matua — further moderation in US wine category trends has seen the company apply "more conservative" long-term market growth assumptions.
This has resulted in reduced long-term earnings growth rates, which will impact carrying values within the Treasury Americas and Treasury Collective, the company said, which represent its cash generating units in the Americas market.
The final impairment amount and allocation to assets will be concluded as part of Treasury Wine's FY26 interim results.
The source: ASX
