February 25, 2020 / 5:27 AM / a month ago

UPDATE 1-Australia's Treasury Wine now flags coronavirus hit to earnings

(Adds coronavirus background, shares)

Feb 25 (Reuters) - The coronavirus outbreak has added to pressure on Treasury Wine Estates Ltd’s earnings, with the winemaker saying on Tuesday it would not meet its already lowered forecast for the current year due to a hit to consumption.

The news weighed on Treasury Wine’s shares, which closed down 4% amid a broader selloff on fears that the virus outbreak was getting worse outside China.

“Consumption across discretionary categories in China has been significantly impacted through February, and that this impact on consumption is expected to be sustained to at least through March,” the company said.

The owner of the Penfolds wine label joins an ever-growing list of companies grappling with the hit to consumer spending as China and other countries take measures to curtail the spread of the flu-like virus.

In January, Treasury had slashed its forecast for growth in earnings before interest, tax, self-generating and regenerating assets (EBITS) to 5% to 10%.

Vitamin maker Blackmores, which also counts China as a key market, flagged earlier in the day that the virus would hit its fiscal 2020 results. (Reporting by Nikhil Kurian Nainan in Bengaluru; Editing by Muralikumar Anantharaman and Maju Samuel)

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