The Duckhorn Portfolio (NAPA) Q1 2025 earnings summary

Executive summary

• Net sales rose 19.9% year-over-year to $122.9 million, primarily due to the Sonoma-Cutrer acquisition and wholesale channel growth.

• Net income declined 28.1% year-over-year to $11.2 million, or $0.08 per diluted share, reflecting higher SG&A and interest expenses.

• Adjusted EBITDA grew 39.9% to $48.6 million, with margin improving by 560 basis points to 39.5%, reflecting strong operational performance and acquisition synergies.

• Adjusted net income increased to $23.8 million, or $0.16 per diluted share, from $17.2 million, or $0.14 per share, a year ago.

• The company entered into a definitive merger agreement to be acquired by Butterfly Equity for $11.10 per share in cash.

Financial highlights

• Gross profit: $61.5 million (up 14.2% year-over-year); gross margin 50.0% (down 250 basis points year-over-year).

• Adjusted gross profit: $63.8 million, up 19.8% year-over-year; adjusted gross margin 51.9%.

• Total SG&A expenses rose 33.8% to $40.8 million; adjusted SG&A increased 5.8% to $23.9 million.

• Operating cash flow was $27.2 million, up from $18.1 million in the prior year period.

• Earnings per share: $0.08 basic and diluted (down from $0.13 year-over-year).

Outlook and guidance

• The merger with Butterfly Equity is expected to close this winter, pending shareholder approval and customary conditions.

• Management expects continued growth from the Sonoma-Cutrer acquisition and ongoing investments in DTC and wholesale channels.

• No specific forward guidance provided for fiscal 2025.