Treasury Wine Estates has scrapped dividends following a $649 million loss for the first half of FY26.

EBITS were $236.4 million versus $225-235 million guidance, a decline of 39.6%, which TWE said reflected the impact of adverse category trends in the US and China, restriction of shipments contributing to parallel import activity in China and cycling of prior year shipments.

TWE said it has suspended the payment of its FY26 interim dividend as a temporary measure to “prioritise the preservation of capital and reduce leverage”.

Penfolds reported a 19.6% decrease in EBITS to $201 million. TWE said demand for the Penfolds brand remains strong, with depletions continuing to grow in China (up 17.2%) and Australia (up 3.5%) and in line with the previous corresponding period in Asia ex-China. Bin 389 and Bin 407 depletions continue to perform well, up 11.3% versus the previous corresponding period.

Net sales revenue decreased 10.1%, driven by the cycling of shipments associated with the initial distribution build following the removal of tariffs in China together with reduced shipments in Asia and Australia, reflecting the active focus to restrict shipments that were contributing to parallel import activity in China.

Treasury Americas reported a 63.6% decrease in EBITS to $44 million and an EBITS margin of 15.5% (down 15.0ppts).
While depletions across the US declined 2.6%, driven by California, TWE has reported that Treasury Americas depletions were up 1.8% across the rest of the US market, led by DAOU (up 2.6%), Frank Family Vineyards (up 8.4%) and Stags’ Leap (up
6.1%).

Net sales revenue decreased 28.4% driven by softer US wine market conditions, disruption from the Californian distribution
transition and cycling the excess of shipments over depletions (0.2 million cases) in the previous corresponding period.

Treasury Collective reported a 51.1% decrease in EBITS to $28.1 million and an EBITS margin of 5.5% (down 4.2ppts).
In the Americas, performance reflected softer US market conditions, the impact of the California distribution transition
and the reduction of customer inventory holdings. TWE said the Treasury Collective portfolio continues to perform in line with expectations in Australia and EMEA.

In the US, 19 Crimes continued to drive declines (down 16.9%), partly offset by continued growth for Matua (+7.9%).

TWE CEO Sam Fischer said: “Today’s results come at a time when we are already making meaningful progress with the decisive actions required to return TWE to a path of sustainable, profitable growth. Our focus is firmly on the future to strengthen execution and ensure we build a stronger, more resilient business for the long term.

“TWE Ascent is the key enabler of this reset. It is a disciplined, multi-year transformation program designed to sharpen
our portfolio, simplify the organisation and optimise our cost base, and I am pleased with the progress we have made
to date.

“Encouragingly, we are seeing our key brands continue to perform in the marketplace and resonate strongly with
consumers, reinforcing confidence in the strength of our portfolio and our ability to deliver improved performance as
we execute the transformation of the business.”

Cheaper brand sell-off back on the table?

In its results presentation, TWE said it would “accelerate” its program to divest non-core assets, leading to speculation the company may consider putting some of its cheaper wine brands back on the market.

TWE cancelled the sale of its Wolf Blass, Lindemans, Yellowglen and Blossom Hill brands in February 2025. Then-CEO Tim Ford revealed during the company’s HY25 results announcement that offers from potential buyers had been too low so the company would retain the brands.

Fischer reassures analysts

In an analyst call, Fischer said while the headline results announced today were “clearly disappointing”, they also reflect the decisive action TWE is taking to return the company to a path of long-term sustainable profitable growth.

“In recent months, we’ve cleared some major hurdles, and I’m feeling optimistic and energised about the future business we are creating,” he said.

“A key driver of this optimism comes from the positive underlying performance of the business with depletions growth continuing in key markets and across key brands. Most notably Penfolds, continued delivery of strong depletions growth in China. And in the US, outside of California, where Treasury Americas depletions grew against broader market weakness.”

Fischer called out DAOU, Frank Family Vineyards and Matua as being stand-out brands in the US.

“DAOU is an amazing brand. We’ve just scratched the surface from a growth opportunity perspective, with meaningful runway to expand distribution of the core portfolio and further grow the on-premise channel,” he said.

“The expansion in category weighted distribution has been the key to growth outside of California with considerable opportunities remaining.

“Frank family is another fabulous brand with huge potential. We are seeing strong depletions growth driven by on-premise strength. And like DAOU increased distribution outside of California as the brand continues to build its status with the U.S. luxury wine consumer.

“And in the premium space, Matua continues to grow ahead of the category in the US. A key driver of recent growth has been expanded distribution of Matua Lighter which has a strong presence in the better-for-you segment and growing at around double the rate of the core brand tier.

“We believe there is a big opportunity for the brand elsewhere with Australia an increasing focus delivering double-digit depletion growth, again, led by distribution expansion in the major retailers. Ensuring we remain focused on best-in-class execution is critical to our growth ambition.”

Fischer said the future was also bright for Penfolds in China.

“The positive news coming out of China around momentum of the Penfolds brand is you just can’t underestimate that impact for us,” he said.

“It’s early days, and we’re not even in the Chinese New Year, but lots of what happens at a brand level happens before the actual celebration. And we’ve got some great anecdotal feedback on the strength of the brand, how well it’s being received from a gifting perspective in the Year of the Horse.”

Building the “white Grange”

Michael Simotas from Jefferies noted that it “seems pretty clear in every market around the world, including China as consumer preferences are shifting towards lighter red and white”.

“Outside of Frank Family, none of your brands are really known for either of those styles,” he said. “What does that evolving the portfolio look like?

Citi analyst Sam Teeger agreed: “Reigniting demand in the face of structural and cyclical headwinds whilst taking cost out (which will need to be partially reinvested to drive growth) won’t be easy, in our view, particularly with Treasury acknowledging its portfolio is underweight in areas of the category seeing faster growth for example luxury whites.”

Fischer said TWE had been exploring the big trends it sees at a category level and overlaying its brands against those trends.

“We can see luxury white wine having really interesting runway starting to get a lot of traction,” he said.

“We looked at our portfolio and said, well, we’ve got some really incredible brands here led by Yattarna that can that play a much, much bigger role as we look into the future.

“That’s the one with the huge credentials, the white Grange, there’s so much more we can do with that.” 

Next steps

Fischer promised that the TWE Ascent program would deliver better results for the company. It aims to drive transformation to create a stronger business, with a focus on delivering attractive returns and cash generation.

He said it was progressing well, with high confidence of cost saving and asset realisation benefits.

The program is focused on three core pillars, with the following guiding principles:

• Portfolio evolution: a portfolio of brands that individually and collectively are positioned to outperform the market
  and which align the brands and assets on the balance sheet to support future strategy while also releasing capital
• Operating model transformation: delivering increased speed, consistency and execution effectiveness
• Operating cost optimisation: targeting $100m per annum in cost improvement, with initial benefits commencing in
  F27 and full realisation across a two to three-year period, delivered through benchmarked performance and
  maximised use of data and automation

The specific plans and targets of TWE Ascent will be disclosed to the market as part of the company’s planned
investor day on 4 June 2026 in Sydney, Australia.