(Bloomberg) -- Australian vintner Treasury Wines Estates Ltd. reported lower-than-expected revenue in its first-half earnings, as US supply chain difficulties and adverse consumer trends in China impacted the luxury wine maker.
Treasury Wines, maker of the iconic Penfolds brand, reported a A$649 million ($458 million) first-half net loss on Monday, compared with a A$221 profit a year earlier. Net sales revenue came in at A$1.3 billion, down 16% year-on-year and lower than analyst expectations of A$1.38 billion.
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However, the company said it is expecting second-half earnings to be higher than the first-half, based on its key EBITS performance metric — earnings before interest, tax and a measure to smooth the volatility of agricultural valuations.
Chief Executive Officer Sam Fischer, who started in the role in October, said in a statement that despite Monday’s results, he was encouraged that the wine company’s key brands were resonating with consumers as he undertakes “the transformation of the business.”
“We are already making meaningful progress with the decisive actions required to return to a path of sustainable, profitable growth,” he said.
Under its new CEO, Treasury has announced a turnaround plan targeting annual savings of A$100 million over the next two to three years, including by cutting inventories to protect demand and reputation of its brands. It comes after a difficult few years for the company following weaker-than-expected demand in China and supply disruptions in the US, sending shares spiraling over the past year to their lowest point since 2011.
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