SYDNEY, July 15 (Reuters) - Australia’s Treasury Wine Estates said on Monday it is destroying some of its aged U.S. inventory, resulting in a A$160 million ($145 million) hit to pre-tax earnings in fiscal 2013 and lower US shipments in fiscal 2014.
Shares in the company were down some 8 percent after the news.
Treasury Wine said it would work with its major U.S. distribution partners to address their excess, aged and deteriorating inventory.
“TWE’s leadership team in the Americas believes old and obsolete product is limiting the country’s growth ambitions,” Chief Executive David Dearie in a statement.
“As such, decisive action must be taken to address these barriers to growth, and I am confident that the steps we are taking support our long term growth agenda.”
The company said fiscal earnings before interest, tax and self-generating and regenerating assets (SGARA) is expected to be in line with analysts’ consensus of A$216 million, before material items including the provision for the inventory cut.