Treasury Wine Estates LimitedPrivate▲ Positive
Capitalrelevance
Restructuring charge and higher profit guidance boost investor sentiment.
Treasury Wine Estates restructures US operations, takes A$558.4 million charge
Corporate Action
Treasury Wine Estates has announced a restructuring plan for its US business, involving the idling of vineyard land, brand write-downs, and inventory write-downs, resulting in a post-tax charge of A$558.4 million, or approximately US$394.4 million. The decision follows a strategic review after declining wine demand led to excess production capacity and high inventory levels. The company's shares surged as much as 7.9% to A$5.86 as investors welcomed the plan, and the company said profit for the year ending June 30 will be higher than previous guidance, with earnings before interest, tax, viticultural and winemaking costs, and material items expected to be A$492.3 million, above the prior forecast of A$480 million to A$490 million. The restructuring plan includes reducing the production of vintage wines in the North Coast region from 2026, idling some vineyard land, writing down inventory mostly consisting of unbottled wine, and writing down the value of brands primarily DAOU, Frank Family Vineyards, and Beaulieu Vineyard.
Restructuring charge and higher profit guidance boost investor sentiment.