News

Treasury Wine Estates posts heavy loss and scraps dividend

16 February 2026 By Ron Emler

Treasury Wine Estates has reported a sharp interim loss and a deeper-than-expected goodwill writedown in the United States, sending shares lower again. The group has also cancelled its dividend as it focuses on cutting debt and rebuilding earnings momentum.

Can it get any bleaker for shareholders in Treasury Wine Estates?

They must be hoping that the interim results to the end of December mark a low point in the group’s fortunes. After the share price was halved last year, it has fallen by a further 5% after issuing dismal numbers.

Treasury made a AU$649.4 million (£335 million) loss for the half-year and increased the size of the cost of its goodwill writedown in the US by taking AU$770.5 million hit, even larger than it suggested in December.

Earnings slump despite stripping out writedowns

Stripping out those big writedowns, Treasury’s overall earnings were down 40% to AU$236.4 million on a 17% nosedive in revenue to A$1.3 billion.

This is Treasury’s first half-year loss since the company split from the Foster’s brewing group in 2011 after previously being known as Southcorp.

Dividend cancelled as debt reduction takes priority

Worse for shareholders, after paying a dividend of 20 cents at this time last year, Treasury has axed its dividend with no promise of when payments will be resumed.

Chief financial officer Stuart Boxer said the company was focused on paying down debt and increasing cash flow, “but it is too early to call, at this stage, the timing of those,” he said.

Penfolds and americas divisions hit hard

Profits in the flagship Penfolds’ division slumped almost 20% to AU$201 million while the Treasury Americas arm suffered a 28% drop in sales as earnings crashed by 64% to AU$44 million.

Treasury said it had been thumped by lower demand for wine in both China and the Unites States, its biggest overseas markets, as the public is shifted away from alcohol and struggling with the cost of living the cost of living.

But at least Treasury has resolved its distribution dispute in California, which is reckoned to come at a net cost of more than A$50 million.

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Project Ascent targets cost cuts and inventory discipline

New chief executive Sam Fischer announced in December that he planned to cut annual costs by A$100 million over the next two to three years by trimming channel stock, which would steady increase pricing and rebuild brand momentum. That Project Ascent is said to be making good progress.

It has also limited shipments into China to curb the grey market of parallel imports. Treasury will cut the inventory of Penfolds in China by 400,000 cases (about AU$215 million worth), and for its US market, it will reduce distributor stock outside California by about 300,000 cases (about AU$125 million worth) over the coming two years.

Cheaper brands may return to sale process

Fischer said he may also revive attempts to offload its cheaper wine brands, having withdrawn four labels – Wolf Blass, Lindemans, Yellowglen and Blossom Hill – from a sale process a year ago when no buyer was found.

He said that Treasury had to adapt to changing market dynamics, which include a global trend of falling wine consumption as customers become more health-conscious. “We do need to focus on discipline inside our organisation,” he said.

Focus shifts to luxury white wine growth

He also wants to tap into potential growth segments such as luxury white wine, with a focus on putting more investment behind Penfolds’ Yattarna label, which was established in the 1990s as a “white Grange”.

“That’s the one with the huge credentials, the white Grange; there’s so much more we can do with that,” he said. Yattarna sells for about one-fifth of the price of Penfolds’ Grange red wine.