Duckhorn Raising Prices

Duckhorn Portfolio thinks its customers can handle a price increase, it said in announcing its earnings for fiscal 2022.  The stock fell 6.7%.  Net sales rose 10.7% to $372.5 million.  Net income rose 7.5% to $60.2 million, or 52 cents a share.

"Our results reflect sustained, healthy share gains within luxury wine, which benefits from the continued premiumization tailwind," said Alex Ryan, CEO/president.

Ryan continued, "Looking to fiscal year 2023, we believe we are well-positioned to continue to outpace the growing luxury wine segment. While we are mindful of macro uncertainties, we believe that our core customer will continue to be resilient. Furthermore, we remain optimistic about our long-term prospects and our ability to execute against a considerable distribution whitespace opportunity. Our exemplary product offering, differentiated go-to-market strategy, prudent growth investments and strong relationships within the trade give us confidence that we will deliver sustainable, profitable growth that seeks to maximize stakeholder value over the long-term."

The increase in net sales was driven by 7.1% volume growth which lapped a robust 40.4% growth rate in the prior year period, supported by positive price/mix contribution of 2.9%, the company said.

"The positive price/mix contribution was primarily attributable to DTC channel sales out-performance relative to wholesale channel growth, augmented by favorable brand mix movements evident in the strong net sales performance for both our wholesale California direct to trade channel and our wholesale to distributor channel versus the prior year period. We now refer to our sales directly to retail accounts in California, a point of distinction among large California wine producers, as the "Direct to Trade Channel". On a like-for-like basis, pricing changes were immaterial to our sales performance," it added.