Treasury Wine Estates Ltd (ASX: TWE) shares are leading the ASX 200 losers today after crashing 20% in early trade.
Why are Treasury Wine Estates shares crashing lower?
The Aussie winemaker downgraded its FY20 guidance after yesterday's market close and investors have been selling quickly this morning.
Treasury Wine said its first-half earnings numbers had been impacted by weak trading conditions in the United States. The group is expecting a 5% increase in first-half net profit after tax (NPAT) to $229.2 million. On top of that, Treasury Wine is forecasting a 6% increase in earnings before interest, tax and self-generating and regenerating assets (EBITS) to $366.7 million.
Treasury Wine shares have slumped 20% in early trade and are valued at just $13.46 per share at the time of writing. The big factor has been an increase in US luxury cost of goods sold (COGS) and Australian commercial COGS. Treasury Wine is unable to recover these costs, which have eaten into its first-half profits.
The Aussie wine group is forecasting EBITS growth of 5% to 10% in FY20 compared to its previous 15% to 20% guidance range. It also revised its FY21 forecast growth to a 10% to 15% range in yesterday's announcement.
CEO Michael Clarke said the group is pleased with its performance across its Asia, Australia and New Zealand, Europe, the Middle East and Africa segments. That hasn't stopped investors selling down Treasury Wine shares in early trade, which sent them to a 52-week low of $13.34 per share this morning.
Which other ASX 200 shares are struggling today?
It's not just Treasury Wine shares that are struggling in early trade. While the S&P/ASX 200 Index (INDEXASX: XJO) has rebounded 0.46% this morning, the oOh!Media Ltd (ASX: OML) and Northern Star Resources Ltd (ASX: NST) shares have slumped.
oOh! shares are down 7.22% after its CEO announced his intention to step down. The advertising group also expects its earnings to come in at the low end of its guidance range.
Northern Star shares are down 3.23% after a weak quarterly update from the Aussie gold miner prior to the market open.
