Andrew Peller Limited

Third-quarter sales increased 3.3% year over year. Gross margin was $45.5 million, or 41.8% of revenue, versus 40.2% last year. Selling and admin expenses were $25.8 million, up 8% year over year. EBITDA rose 6% to $19.7 million from $18.5 million, and year-to-date EBITDA was $57.1 million, up close to 16%. Revenue was consistent with prior year on a year-to-date basis, and excluding the one-time LCBO strike impact in Q2 fiscal 2025, year-to-date revenue growth was between 1.5% and 2%. Net debt was roughly $164 million, down from $182 million at fiscal year-end, and debt-to-EBITDA was about 2.3x. Management did not provide formal next-quarter or full-year numerical guidance, but said the quarter and year-to-date results put the company on track for a strong fiscal 2026 and ongoing growth in fiscal 2027.

Paul Dubkowski framed Q3 as another strong quarter with execution across the business, saying revenue, margins, and EBITDA are at or near all-time highs. He highlighted market share gains in the West, sustained momentum in Ontario, strong estate traffic, and improving Wine Club performance, while pointing to LayLow and the Peller Estates refresh as key innovation milestones. His tone was confident and constructive, with repeated emphasis on momentum into fiscal 2027.

Renee Cauchi focused on the financial drivers behind the quarter: 3.3% sales growth, gross margin of $45.5 million or 41.8%, EBITDA of $19.7 million, and year-to-date EBITDA of $57.1 million. She said margin improvement came from the cost savings program, especially lower glass bottle and inbound freight costs, plus the Ontario Grape Support Program. She also noted SG&A of $25.8 million, interest expense down 26%, net debt of about $164 million, and inventory of $156 million, down from $170 million at fiscal 2025 year-end.

Analysts pressed on how much of the revenue growth came from new products versus market share gains; management said it was a mix of core portfolio performance, innovation, and strong execution across East and West channels. They were also asked about margin sustainability, and management said margins should continue to improve into fiscal 2027, but at a slower rate because most of the $25 million cost improvement plan has already been delivered. Other questions focused on USMCA risk, Ontario consumer shifts, M&A, asset sales, and the rollout of LayLow; management said USMCA exposure is limited, M&A remains an active strategic process, and asset sale discussions are ongoing but not ready to announce.