Crimson Wine Group Ltd., maker of Pine Ridge Vineyards in Napa Valley and Seghesio Household Vineyards in Sonoma County, reported quarterly decrease gross sales and earnings, reflecting continued stress throughout the posh wine market as distributors and customers pull again.
The Napa-based firm is focusing efforts on “direct-to-consumer development and stock administration” because the trade adjusts to slower development and shifting shopper tastes.
Web gross sales for the quarter ended Sept. 30 fell to $13.3 million, down 21% from $16.9 million a yr earlier. The corporate’s outcomes present softness in practically each channel — notably, wholesale shipments and tasting-room gross sales — amid what trade analysts have described as an ongoing correction in shopper wine demand.
By channel, wholesale income dropped 34% to $6.2 million, from $9.4 million a yr earlier, as distributors trimmed orders, stress to cut back costs elevated and exports to Canada have suffered from worldwide commerce tensions.
“The partial restoration of gross sales into Canadian markets together with adverse shopper sentiments towards U.S. alcoholic merchandise resulted in a lower in export wine gross sales through the present quarter as in comparison with the identical quarter in 2024,” wrote Chief Monetary Officer Adam Howell within the regulatory submitting Nov. 6.
Direct-to-consumer (DTC) income — which incorporates tasting rooms, wine golf equipment and on-line gross sales — slipped 4% to $6.2 million from a yr earlier. Revenues from bulk wine, customized winemaking and occasions (labeled as “different” gross sales) totaled $900,000, down from $1.1 million.
Gross revenue fell to $6.3 million, from $8.1 million, as increased stock write-downs minimize into margins. Howell mentioned the corporate recorded $2.1 million in stock write-downs for the primary 9 months of the yr, in contrast with $500,000 a yr in the past, “reflecting stock anticipated to be offered at a loss as a consequence of present market circumstances.”
Working bills totaled $7.5 million, about flat from the prior yr, producing an working lack of $1.2 million. Nonetheless, Crimson posted web earnings of $900,000, or 5 cents a share, aided by $2.5 million in different earnings, together with insurance coverage recoveries.
For the primary 9 months of this yr, web gross sales had been $44.8 million, down from $50.1 million a yr earlier. Wholesale gross sales fell 14% to $23.9 million, DTC declined 4% to $18.4 million, and revenues from bulk wine, customized winemaking and occasions dropped 20% to $2.4 million.
The corporate famous that the DTC decline was “primarily pushed by a lower in gross sales from wine golf equipment and tasting rooms, partially offset by a rise in e-commerce,” Howell wrote. That shift displays broader shopper habits as on-line channels maintain regular, whereas in-person and membership gross sales lag.
Based in 1991, Crimson Wine Group has holdings alongside the West Coast. Different manufacturers are Chamisal Vineyards and Malene in California’s Central Coast; Archery Summit in Oregon’s Willamette Valley; and Seven Hills Vineyard and Double Canyon in Washington’s Walla Walla Valley and Horse Heaven Hills, respectively.
The slowdown echoes tendencies throughout the trade, the place wineries are discounting to maneuver inventory and scaling again manufacturing. Analysts have pointed to rising inventories, cautious customers and weaker restaurant demand as indicators of a correction within the luxurious section.
Crimson ended the quarter with $23.6 million in money and $14.6 million in long-term debt.
Traded on OTC Markets, Crimson’s shares (ticker: CWGL) closed Monday at $5.13, down 1 cent from Friday.
Jeff Quackenbush joined North Bay Enterprise Journal in Could 1999. He covers primarily wine, development and actual property. Attain him at jeff@nbbj.information or 707-521-4256.
