TWE Analysis: Treasury Wine Estates December 2025 Trading Update

Event: Treasury Wine Estates December 2025 Trading Update | Date: 2025-12-15 | Source: Treasury Wine Estates ASX Announcements

Shares Halted as Treasury Wine Reveals Inventory Overhang and Margin Squeeze

Treasury Wine Estates (ASX: TWE) requested a trading halt on 15 December 2025 pending a major trading update and outlook revision, released later that day. The announcement disclosed a significant customer inventory overhang of approximately 0.7 million cases (equivalent to $340 million in net sales revenue), primarily in China (0.4 million cases, $215 million) and the US (0.3 million cases, $125 million), requiring a two-year normalization period through restricted shipments. First-half FY26 EBITS guidance was set at $225-235 million, implying an annualized run rate of about $460 million versus FY25's $771 million, reflecting a 16.2% margin versus 26.2% previously. Leverage is expected to reach 2.5x at 1H26 and remain above the 1.5-2.0x target range for approximately two years, prompting a review of dividends, non-core asset sales, and capital constraints. The company also launched the TWE Ascent transformation program targeting $100 million in annual cost savings over two to three years. Full details are available in the ASX announcement.