Duckhorn Targeting Full-Year Sales Of $400 Million
June 7, 2024The Duckhorn Portfolio saw sales increase 1.4% to $93 million in its fiscal third quarter ended in April, with adjusted EBITDA rising 5.3% to $38 million. The increases came despite “a challenging industry backdrop,” according to president and CEO Deirdre Mahlan, who noted that the company’s “top line results were impacted by the softer wine market.”
Still, Duckhorn eked out sales growth enabled by a 6% boost from price/mix, as volume declined 4.6% for the quarter, with 60% of sales going through the wholesale channel, 16% through its own California distribution business, and 24% through the direct-to-consumer channel. For the first three quarters of Duckhorn’s fiscal year, sales slipped 1.6% against the prior year, with volume down 3.5%.
In calendar 2023, top-seller Decoy by Duckhorn grew an estimated 2% to 1.45 million cases in the U.S., according to Impact Databank, up from 1.1 million cases three years earlier, while flagship label Duckhorn Vineyards rose an estimated 3.5% to 305,000 cases and Decoy Ltd jumped 35% to 166,000 cases. Other brands in the portfolio include Kosta Browne, Goldeneye, Paraduxx, Calera, Migration, Postmark, Canvasback, Greenwing, and latest acquisition Sonoma-Cutrer, which grew 7% to 580,000 cases.
Late last month Duckhorn announced expanded partnerships with Republic National Distributing Co. (RNDC) and Breakthru Beverage Group, after a detailed review of its distribution footprint. RNDC will now distribute the Duckhorn range in 21 states, while Breakthru will be its distributor in 11 markets.
For its full fiscal year ending in July, Duckhorn is now targeting sales of between $398 and $408 million, along with adjusted EBITDA of between $146 and $150 million.
“Our net sales fell short of our expectations,” Mahlan told analysts. “However, Duckhorn wines consistently outperformed the broader $15 and above luxury wine market as reported by Circana. While we expect to continue to take share and outpace the luxury market, we believe the softness across the industry will persist in the coming quarters. The industry growth rate for luxury wine over the past 12 weeks has been flat to 1%, which we expect to continue.”—Daniel Marsteller
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