Crimson Wine Group Ltd.
The Napa-based company is focusing efforts on “consumer-specific growth and innovation management” as the industry adapts to slower growth and consumer tastes.
Net sales for the Quarter ended September 30 fell to $13.3 million, down 21% from $16.9 million a year earlier. The company’s results show a softening in all other channels – in particular, sales and tasting sales – which the chamber’s analysts described as a continued improvement in consumer demand for wine.
According to the station, the revenue lost 34% to $ 6.2 million, from $ 9.4 million a year earlier, as the distribution of orders decreased, unloading prices increased and exports to Canada suffered from international trade conflicts.
“A partial recovery in sales in the Canadian market and negative consumer sentiment against US alcohol brands led to a decline in the 2024 quarter,” wrote chief financial officer Adam Hole.
Direct-to-Consumer (DTC) revenue Revenue from bulk wine, custom winemaking and events (divided into “other” sales) is $900,000, down from $1.1 million.
Gross profit fell to $6.3 million, from $8.1 million, as higher write-downs reduced margins. Howell said the company recorded $2.1 million in write-downs for the first nine months of the year, compared to $500,000 a year ago, “
Operating costs have been $7.5 million, about the apartment from the previous year, producing an operating loss of $1.2 million. However, Crimson posted income of $900,000, or 5 cents a share, helped by $2.5 million in other income, including insurance acquisitions.
In the first nine months of this year, Net sales were $44.8 million, down from $50.1 million a year earlier. Gross sales fell by 14% to $23.9 million, DTC decreased by 4% to $18.4 million, and income from bulk wine, winemaking and events decreased to $2.4 million.
The company noted that the decline in DTC was “primarily driven by a decline in sales from wine clubs and tasting rooms, partially offset by increased e-commerce,” Howell wrote. That shift reflects the performance of the wider consumer as online channels are holding strong, while the individual selling person and the club.
Founded in 1991, the Crimson wine group is shy of the west coast. Other productions are Chamisal and Malene vineyards on the California Contraal Coast; Archery Conference in Oregon’s Willamette Valley; and seven wills and double canyon wineries in Washington walla wallalle and horses, respectively.
The slowdown is trending across the industry, with wineries cutting back on moving stock and scaling back production. Analysts pointed to rising inventory levels, cautious consumers and the need for restaurant abserrature as signs of a correction in the luxury sector.
Crimson ended the quarter with $23.6 million in CASH and $14.6 million in long-term debt.
Sold in OTC markets, shares of Crimson (Ticker: CWGL) closed Monday at $5.13, down 1 cent from Friday.
Jeff Quackenbush joined the North Bay business magazine in May 1999. He primarily covers wine, construction and real estate. Reach him at [email protected] or 707-521-4256.
