Treasury Wine Estates Ltd. announced a A$687.4 million ($450 million) writedown of its U.S. business, causing its shares to fall to a 10-year low. This non-cash impairment is primarily due to a forecast decline in cash flows and will result in all goodwill in the Americas being written off. This follows a previous writedown of over $450 million in goodwill linked to its U.S. business in December, citing excess inventory and surplus production capacity.
The company is undertaking a comprehensive review of its U.S. operations, which includes plans to sell its Paso Robles and San Luis Obispo wineries. It also intends to divest assets and exit leases across Napa Valley, Sonoma, and California’s Central Coast over the next four years. Production of key luxury brands like Frank Family Vineyards and Stag’s Leap will be consolidated at the St Helena Winery, which will become the primary luxury production hub in the U.S.
Treasury Wine Estates has acknowledged ongoing softness in the U.S. wine market, with supply and demand not expected to rebalance until 2028. The company reported a post-tax impairment of A$771 million ($543 million) related to brands such as Sterling and Beringer, as well as inventory. For the six months through December, its Americas unit saw net sales fall 28% to A$283 million ($200 million), and global net sales were down 17% to A$1.3 billion ($910 million). The company aims to reshape its strategy through the TWE Ascent transformation program, focusing on brand portfolio changes, operating model adjustments, and cost optimization, with expected annual savings of A$100 million ($70 million) over the next two to three years.
Key U.S. brands collectively declined nearly 12% by volume in calendar 2025, with 19 Crimes shedding approximately 465,000 cases, while Matua, Frank Family Vineyards, and St. Huberts showed solid growth. Daou, a higher-priced Paso Robles label, experienced its first decline since its acquisition, partly due to distributor disruption in California. The company also incurred a $65 million hit from repurchasing inventory from its Treasury Americas Collective portfolio held by Republic National Distributing Co. in California.
