Treasury Wine Estates Limited

FY26 EBITS was $492 million, ahead of guidance. Statutory NPAT was a loss of $1.1 million, driven by noncash impairment of U.S. assets, including an additional $558 million impairment tied to U.S. supply-chain rebalancing initiatives recognized in the second half. Pre-material items, net profit after tax was $275 million and EPS was $0.34 per share. NSR per case fell 3%, EBITS margin decreased to 19%, and ROCE declined to 7.9%. Net operating cash flow before interest, tax and material items was $535.3 million, down 34.7%, and capital expenditure was $113.4 million. Leverage was 2.8x, and liquidity available funds were $1.3 billion at June. For FY27, management reiterated group EBITS is expected to be at least equivalent to FY26. Divisional FY27 EBITS guidance was Greater China $280 million to $310 million, emerging markets $95 million to $115 million, the Americas approximately $50 million, and ANZ and Europe $100 million to $120 million. FY27 CapEx is expected to be approximately $75 million. Management said Ascent savings should contribute at least $40 million in FY27 and $100 million per annum in full by FY29.

Sam Fischer framed FY26 as a year of decisive action to protect brand and channel health and begin the Ascent transformation. He said the company is deliberately accepting near-term financial pressure to fix parallel imports, reduce inventory, and retool the operating model, while arguing the core brands remain strong. His tone was confident and upbeat on Penfolds, constructive on the U.S. turnaround, and firm that the company is taking “decisive” steps rather than waiting for conditions to improve.

Justin Pipito focused on the large noncash and structural items affecting the year: a post-tax material charge of $1.3 billion, including $458 million in second-half U.S. supply-chain rebalancing actions and a further $100 million impairment of U.S. brands. He noted total inventory value fell 7% year over year, current inventory fell $182 million, net operating cash flow before interest, tax and material items was $535.3 million, and capital expenditure was $113.4 million, with FY27 CapEx reduced to about $75 million. He also emphasized leverage at 2.8x, the expectation that it is the peak, a target below 2x by end-FY28, and healthy liquidity of $1.3 billion.

Analysts pressed management on how FY27 group EBITS can be flat when divisional ranges appear to sum below the group result. Management said the ranges are more about the new regional reporting structure and timing nuances, while the group guide is the anchor and is supported by at least $40 million of Ascent benefits. The biggest follow-up topics were the Americas: analysts asked about the mid-cycle earnings power after the RNDC transition and inventory write-downs, and management said the business should improve over time but the COGS drag from structural misalignment means the bounce-back will not be immediate. Questions also focused on Penfolds China depletions and Bin 407; management said stronger China depletions reflect brand strength, channel normalization and some parallel-import capture, while Bin 407 shipments were paused to restore pricing and route-to-market control.