Andrew Peller (ADW) Q3 2025 earnings summary

Executive summary

• Q3 2025 delivered strong year-over-year growth in revenue, margins, and EBITDA, driven by retail modernization in Ontario and successful big-box channel expansion, with revenue rising 5.2% to $105.4 million.

• Net earnings reached $7.7 million in Q3 2025, reversing a net loss of $0.4 million in the prior year quarter.

• Distribution points in Ontario expanded by over 4,000 locations, with big-box retail demand exceeding expectations and ongoing product lineup evolution.

• Honest Lot emerged as the fastest-growing brand, reflecting consumer trends toward healthier-for-you products.

• Working capital improvements and inventory right-sizing contributed to improved free cash flow and debt reduction.

Financial highlights

• Q3 sales increased CAD 5.2 million (5.2% year-over-year) to CAD 105.4 million, mainly from big-box store sales and the Ontario VQA Support Program.

• Q3 margin rose to CAD 42.4 million (up 22%), with margin as a percentage of sales at 40.2% versus 34.7% last year.

• EBITDA for Q3 was CAD 18.5 million, up 40% from CAD 13.2 million last year; year-to-date EBITDA was CAD 49.4 million, up 20%.

• Net earnings per Class A share for Q3 was $0.18 (vs. loss of $0.01); year-to-date: $0.28 (vs. $0.10).

• Inventory decreased to CAD 167.9 million from CAD 192.5 million at fiscal 2024 year-end, with cash from operations at CAD 59.6 million year-to-date.

Outlook and guidance

• Q4 is expected to be the lowest volume quarter, with some further balancing and modulation in big-box channel sales.

• Margin expansion is anticipated next year, though seasonality and inflationary pressures remain.

• Management is confident in outperforming the category through innovation and channel expansion.

• Continued focus on cost savings, innovation, and adapting to evolving retail channels.