Down 50% in a year, why are Treasury Wine shares sinking on Monday?

Treasury Wine Estates Ltd (ASX: TWE) shares are taking a tumble today.

Shares in the S&P/ASX 200 Index (ASX: XJO) global wine company closed on Friday trading for $5.82. In morning trade on Monday, shares are changing hands for $5.61, down 3.6%.

For some context, the ASX 200 is just about flat at this same time.

Here’s what’s got investors reaching for their sell buttons.

What’s happening with Treasury Wine shares today?

Treasury Wine shares are underperforming today after the company announced that it expects to recognise a non cash impairment of its United States-based assets.

When the company released its 2025 Annual Report, management said that an 11% decrease in future cash flows in the Americas business of 11% per year over the forecast period would “reduce impairment headroom to nil”.

Today, the global wine company reported that amid further moderation in US wine category trends, it has “applied more conservative long-term market growth assumptions”.

The new assumptions have reduced Treasury Wine’s long-term earnings growth rates, which management noted will impact carrying values within the Treasury Americas and Treasury Collective, which are the Americas cash generating units.

The final impairment amount and allocation to assets will be concluded as part of the 2026 interim results; however, it is expected that the impairment will result in at least all goodwill ($687.4m at 30 June 2025) currently carried in the Americas being written off, with potential to impact other assets.

The company noted that a number of its larger brands, including DAOU, Frank Family Vineyards, and Matua, continue to grow ahead of the market.

But Treasury Wine shares have come under renewed pressure with the company stating:

The final impairment amount and allocation to assets will be concluded as part of the 2026 interim results, however it is expected that the impairment will result in at least all goodwill ($687.4 million at 30 June 2025) currently carried in the Americas being written off, with potential to impact other assets.

What else has been pressuring the ASX 200 wine company?

On 13 October, management withdrew FY 2026 earnings guidance, citing continued uncertainty in its core markets of the US and China.

“Given the uncertainty that remains as to the outlook, TWE is not in a position to provide revised guidance at this point in time,” management noted. Shares closed down 15% on the day.

Today, Treasury Wine said that following Sam Fischer’s commencement as CEO, the company will host an investor conference call in mid-December, which will include a progress update on performance in key markets, including China and the US.

With today’s intraday losses factored in, Treasury Wine shares are down 50.5% in a year. Losses which will have only been modestly eased by the two partly franked dividends the company paid eligible stockholders over the 12 months.

At the current share price, Treasury Wine trades on a 7.1% partly franked trailing dividend yield.

The post Down 50% in a year, why are Treasury Wine shares sinking on Monday? appeared first on The Motley Fool Australia.

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• Leading broker names 1 ASX 200 share to buy and 1 to hold

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Treasury Wine Estates. The Motley Fool Australia has positions in and has recommended Treasury Wine Estates. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.