Andrew Peller (ADW) Q2 2025 earnings summary

Executive summary

• Q2 fiscal 2025 revenue rose to CAD 109.2 million, up from CAD 100.2 million in Q2 FY2024, driven by increased retail sales during the LCBO strike and strong performance across multiple sales channels.

• EBITDA reached CAD 18.0 million, up 19% from CAD 15.1 million last year, while net earnings for Q2 FY2025 were CAD 4.6 million, down from CAD 5.4 million.

• The company gained market share nationally in both 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.

• Gross profit for Q2 FY2025 increased to CAD 43.5 million from CAD 38.7 million.

Financial highlights

• Q2 revenue increased by CAD 9.1 million (9% year-over-year) to CAD 109.2 million, primarily due to higher retail store 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%).

• Operating cash flow for the six months was CAD 40.8 million, up from CAD 29.8 million year-over-year.

• 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.

Outlook and guidance

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

• Expects continued innovation and new product launches in core and growth categories.

• Management notes Q2 and Q3 are historically strongest due to seasonality and holiday demand.

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