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, partially offset by declines in LCBO and company-owned retail stores.

• Revenue for Q3 2025 rose 5.2% year-over-year to $105.4 million, with net earnings reaching $7.7 million ($0.18 per Class A share), reversing a net loss of $0.4 million in Q3 2024.

• Gross margin improved to 40.2% in Q3 2025 from 34.7% a year earlier, aided by the Ontario VQA Support Program and cost savings.

• 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 revenue reached CAD 314.1 million (up 4.4%), and EBITDA was CAD 49.4 million (up 20%).

• Dividend declared: $0.185 per Class A share, $0.161 per Class B share.

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 focused on capitalizing on the evolving Ontario retail landscape and growing market share through innovation and channel expansion.

• Confidence expressed in outperforming the category via consumer-centric innovation and operational efficiency.

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