Andrew Peller (ADW) Q2 2025 earnings summary

Executive summary

• Q2 fiscal 2025 revenue increased by 9% year-over-year to CAD 109.2 million, driven by strong retail store sales during the LCBO strike and robust performance in restaurants and hospitality channels.

• EBITDA rose to CAD 18.0 million, up 19% from CAD 15.1 million last year, reflecting operational improvements and cost efficiencies.

• The company gained national market share in VQA and IDB wine categories, with notable growth in brands like Grey Monk, Gretzky, Copper Moon, and Honest Lot.

• Portfolio diversification and innovation, including expansion in the Healthier For You category and owned imports, contributed to performance.

• Net earnings for Q2 2025 were $4.6 million ($0.11 per Class A share), down from $5.4 million ($0.13 per Class A share) in the prior year, impacted by higher interest and other expenses.

Financial highlights

• Q2 revenue reached CAD 109.2 million, up CAD 9.1 million (9% year-over-year), mainly from higher retail sales during the LCBO strike.

• Margin rose to CAD 46.3 million, up 12% from the prior year, with margin as a percentage of sales at 42.4% (vs. 41.2%).

• EBITDA for Q2 was CAD 18.0 million, up from CAD 15.1 million last year; YTD EBITDA was $30.8 million, up from $27.8 million.

• Selling and administration expenses were $28.3 million, up 8% year-over-year, but improved to 26% of sales in Q2 and 25.7% YTD.

• Inventory decreased to CAD 162 million from CAD 192.5 million at fiscal 2024 year-end.

• Long-term debt reduced to CAD 180.3 million from CAD 208.3 million, with CAD 88 million available in the revolving credit facility.

• Year-to-date cash from operations was CAD 40.8 million, up from CAD 29.8 million last year.

• Dividend declared: $0.123 per Class A share and $0.107 per Class B share.

• Recognized $2.9 million in Q2 and $6.1 million YTD from the revised Ontario VQA Support Program.

Outlook and guidance

• Focus remains on above-category sales growth, innovation in core and growth categories, margin expansion, and disciplined cash management.

• Healthier-for-you product offerings are among the fastest-growing segments.

• Anticipates debt levels to rise as the domestic harvest completes.

• Monitoring the impact of Ontario retail modernization and BC weather events, with updates to follow in future quarters.