This article first appeared on GuruFocus .
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EBITS:$236 million, slightly ahead of guidance.
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Statutory NPAT:Loss of $649.4 million due to non-cash impairment of US assets.
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Leverage:2.4 times, in line with guidance.
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NSR per Case:Fell 5% due to reduced ultra-luxury sales in Penfolds.
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EBITS Margin:Decreased 7 percentage points to 18.2%.
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ROCE:Declined 1.7 percentage points to 9.5%.
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Net Profit After Tax (Pre-material items):$128 million.
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EPS:$0.158 per share.
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Penfolds EBITS:$201 million, with expected full-year EBITS of approximately $400 million.
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Treasury Americas EBITS:$44 million, with expected full-year EBITS of approximately $90 million.
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Treasury Collective EBITS:$28.1 million.
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Depletions Growth:Penfolds Bin 389 and 407 up 11%; China depletions up 17%.
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Net Operating Cash Flow:$264.6 million, a decrease of 38.1% from the prior period.
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Cash Conversion:82.4%.
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Capital Expenditure:$76.8 million, with full-year CapEx expected to be approximately $125 million.
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Liquidity:$1 billion in cash and committed undrawn debt facilities.
Release Date: February 15, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Treasury Wine Estates Ltd ( TSRYF ) reported EBITS of $236 million, slightly ahead of the guidance range provided in December.
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Penfolds brand showed strong depletions growth in China and the US outside of California, indicating positive underlying business performance.
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The company has taken decisive actions to maintain brand strength and reduce parallel import activity, particularly in China.
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Treasury Wine Estates Ltd ( TSRYF ) has initiated a multi-year transformation program, TWE Ascent, aimed at delivering $100 million in cost savings over two to three years.
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The company reached a settlement agreement with RNDC, providing clarity to its route to market in the US and plans to partner with Reyes Beverage Group in six states.
Negative Points
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Treasury Wine Estates Ltd ( TSRYF ) reported a statutory NPAT loss of $649.4 million, primarily due to a non-cash impairment of US assets.
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The company suspended its FY26 interim dividend as a temporary measure to reduce balance sheet gearing.
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NSR per case fell by 5%, impacted by reduced ultra-luxury sales in Penfolds and actions to reduce parallel imports in China.
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EBITS margin decreased by 7 percentage points to 18.2%, driven by changes in sales mix and higher operating costs.
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The US luxury wine market faced disruptions, particularly in California, affecting Treasury Americas' performance.
Q & A Highlights
Q: Hi, good morning team. I was wondering if you could just talk about pricing and if there has been much investment in wholesale pricing in the China market to clear inventory, and it does look like there has been some further weakness on the pricing front through January. A: Yeah, thanks Ben. We have not changed anything in relation to our wholesale pricing, and we haven't given any kind of extraordinary discounts. As parallel dries up, there could be some increased competition in the market, but generally speaking, I am feeling very positive about these parallel initiatives. We are getting very positive feedback from all of the formal distributors inside China, and I would expect to see more stability and elevation in our wholesale pricing going forward. - Sam Fischer, CEO
Q: Morning Sam. Morning Stuart. Sam, as far as the key issue, the most pressing issue for investors right now outside of the operating performance is the balance sheet repair. How do you manage getting growth back while maintaining and repairing your balance sheet? A: Thanks David for your question. Growth is indeed a priority. We are focused on execution, activation, and distribution gains. We have wired depletions, growth, and execution standards into our performance rhythm. The positive news from China around the momentum of the Penfolds brand is significant. We need to focus on discipline inside our organization, ensuring we spend all our money on supporting growth and controlling cash spend through CapEx. In the longer term, the Ascent program is clarifying our portfolio and ensuring a fit-for-purpose operating model to support growth. - Sam Fischer, CEO
Q: Just a question regarding Penfolds. Did Penfolds lack curiosity around the ultimate in-market demand for those non-China and non-Australian markets, or was demand generation ineffective? A: Those markets do look disrupted due to specific actions we are taking around operators contributing to parallel. However, in key markets like Malaysia, Thailand, and Singapore, the brand is being developed outstandingly. The numbers are disrupted as we normalize domestic consumption versus consumption driven from outside the markets. The brand is in a great place outside of China. - Sam Fischer, CEO
Q: Good morning Sam. I just wanted to clarify the commentary on Americas EBIT. You mentioned $90 million for FY26, excluding any benefits and costs of the RNDC settlement. Can you clarify what those benefits and costs are? A: The net of the benefits less the cost from the California settlement will be a positive number. The guidance around $90 million excludes the flow-through of any of that benefit. When reporting Americas EBITS, think of $90 million plus some small net positive. - Stuart Boxer, CFO
Q: Hi Sam, hi Stuart. Just another question on the US. How are you thinking about the potential disruption outside of California in the seven other states that RNDC is getting out of? A: Reyes is a business we know well, and we feel great confidence in them. The transaction is progressing, and we expect it to complete in the half. Reyes will pick up the business and people from RNDC, making it a smoother transition than in California. We are already speaking to Reyes about building plans for a seamless transition. - Sam Fischer, CEO
Q: Morning everyone. When you repurchase the inventory from RNDC in California, you are going to be holding it on your balance sheet at a cost which would effectively give you zero gross margin. What confidence do you have in your ability to recover that cost? A: We are confident that the inventory will be saleable. The shape of the P&L will be a challenge, but from what we see, it is going to be fine from a recoverability perspective. - Stuart Boxer, CFO
Q: Morning guys. Over the last 15 years or so, every four or five years TWE has had these kind of big write-offs, overstocking issues. How do you improve your processes and understanding of where inventory is so that you do not have these issues going forward? A: The medium to long-term strategy through the Ascent program will give us much more clarity. We are looking at the category, understanding trends, and wiring ourselves to tap into those trends. Winning in the marketplace through execution will underpin future and consistent growth. - Sam Fischer, CEO
Q: Morning Sam and Stuart. Just a follow-up on Penfolds and the depletions in China. The plus 17% depletion still looks relatively strong compared to peers. What drove that number, and how may it trend as you work through this destocking process? A: The brand is in great shape, being mentioned alongside Moutai. The strength of the brand, team, and activation in the market underpins performance. We have confidence from our distributors, and there is a suite of factors driving depletions momentum and future expectations. - Sam Fischer, CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
