The Duckhorn Portfolio Appoints Interim CEO and Industry Veteran Deirdre Mahlan as President and Chief Executive Officer
The Duckhorn Portfolio, Inc. (NYSE: NAPA) appoints Deirdre Mahlan as President, CEO, and Chairperson. Mahlan brings 30 years of industry experience and will focus on integrating Sonoma-Cutrer Vineyards acquisition, advancing route-to-consumer strategy, and driving profitable growth. The Company closed the acquisition of Sonoma-Cutrer Vineyards, enhancing its position in the luxury wine market. The Company is conducting a distribution network evaluation and expects third quarter net sales to be $91M-$93M due to soft wine market demand. The Company will provide updated fiscal 2024 outlook on June 6, 2024.
Appointment of industry veteran Deirdre Mahlan as President, CEO, and Chairperson brings extensive experience to lead the Company forward.
Acquisition of Sonoma-Cutrer Vineyards enhances The Duckhorn Portfolio's position in the luxury wine market, expanding brand architecture and driving potential net sales growth.
Implementation of route-to-consumer strategy aimed at increasing focus and investment from distributor partners to sustain profitable growth.
Softness in the wine market impacts third quarter net sales, with a lower-than-expected response rate to the Kosta Browne appellation series offering.
The Company faces challenges in consumer demand softness despite efforts to deliver profitable growth that outpaces the industry.
Preliminary net sales results are subject to change, and actual results may differ materially from the estimates provided.
Welcomes Sonoma-Cutrer Vineyards to The Duckhorn Portfolio
Advances Route-to-Consumer Strategy
Announces Preliminary Third Quarter 2024 Net Sales
“We are thrilled Deirdre will serve as our permanent President, CEO and Chairperson, and look forward to continuing to partner with her to deliver on the vision she has for The Duckhorn Portfolio,” said Michelle Gloekler, The Duckhorn Portfolio’s lead independent director and chair of the CEO search committee. “Her industry track record and performance both on our Board and as interim CEO make it clear that Deirdre is the ideal leader to spearhead the Company’s next phase of growth.”
Mahlan brings over 30 years of alcohol and beverage industry experience and an extensive track record of operational and financial leadership. Previously, she spent 20 years at Diageo, most recently serving as President of Diageo North America. Prior to that, Mahlan held positions of increasing responsibility in finance, including five years as CFO of Diageo plc. Earlier in her career, Mahlan spent three years at Joseph E. Seagram & Sons and eight years at PricewaterhouseCoopers Limited. Mahlan also serves on the boards of Kimberly-Clark Corporation, a consumer goods company, and Haleon plc, a healthcare goods company.
“Despite the external headwinds facing our industry, I have strong conviction that the Company is well-positioned to leverage our industry leadership, talented teams and extensive partnerships to remain at the forefront of the luxury wine category,” said Mahlan. “My years of experience with the Company, both as interim CEO and as a member of the Board since 2021, give me valuable perspective on the incredible opportunity in front of us. I’m honored the Board has entrusted me to lead The Duckhorn Portfolio at this important time.”
Mahlan added, “My key priorities in the immediate term will be ensuring the successful integration of Sonoma-Cutrer and advancing our route-to-consumer action plan, among other priorities. As I work with The Duckhorn Portfolio team to lead the Company’s next chapter, we will be focused on driving consistent, profitable growth and creating meaningful value for all our stakeholders.”
Closing of the Sonoma-Cutrer Vineyards Acquisition
Today, the Company announced the closing of its acquisition of Sonoma-Cutrer Vineyards, one of California’s best-known and fastest-growing luxury Chardonnay winery brands, from Brown-Forman Corporation (NYSE: BF.B). This acquisition meaningfully enhances the Company’s position within the Chardonnay category, the number one domestic white varietal, expands its brand architecture and solidifies its standing as a leading luxury wine company. The Company expects the acquisition will be accretive in fiscal 2025, and the Company is confident run-rate synergies will exceed the previous estimate of
Route-to-Consumer Strategic Realignment
As previously communicated, the Company is conducting a comprehensive evaluation of its distribution network, with the goal of driving a significant increase in focus and investment from our distributor partners. The Company expects to implement a strategy to place its brands in the distribution network that it believes will best position the Company for sustained profitable growth.
Third Quarter Preliminary Net Sales Results
The Company also announced that net sales for the third quarter of fiscal 2024 on a preliminary and unreviewed basis are expected to be in the range of
The foregoing preliminary net sales information reflects management's current views with respect to the Company's financial results. Such preliminary financial information is subject to finalization and should not be viewed as a substitute for full quarterly financial statements prepared in accordance with applicable accounting standards. In the course of preparing and finalizing the Company’s financial statements for the third quarter ended April 30, 2024, this preliminary estimate is subject to change, and the Company may identify items that will require it to make adjustments to such estimate. For these or other reasons, the preliminary net sales estimates may not ultimately be indicative of the Company's results for the third quarter ended April 30, 2024, and actual results may differ materially from those described above. No independent registered public accounting firm has reviewed, examined, or performed any procedures with respect to, nor have they expressed any form of assurance on, the preliminary net sales information.
Third Quarter Fiscal 2024 Conference Call Information
The Company will report financial results for the third quarter ended April 30, 2024 on Thursday, June 6, 2024, after market close.
The Company will host a conference call to discuss these results at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time.) Investors interested in participating in the live call can dial 833-470-1428 from the
About The Duckhorn Portfolio, Inc.
The Duckhorn Portfolio is North America’s premier luxury wine company, with eleven wineries, ten state-of-the-art winemaking facilities, eight tasting rooms and over 2,200 coveted acres of vineyards spanning 38 Estate properties. Established in 1976, when vintners Dan and Margaret Duckhorn founded Napa Valley’s Duckhorn Vineyards, today, our portfolio features some of North America’s most revered wineries, including Duckhorn Vineyards, Decoy, Sonoma-Cutrer, Kosta Browne, Goldeneye, Paraduxx, Calera, Migration, Postmark, Canvasback and Greenwing. Sourcing grapes from our own Estate vineyards and fine growers in
Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In some situations, you can identify forward-looking statements by words such as “approximately,” “anticipate,” “assume,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “future,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “target,” “will” and similar terms and phrases to identify forward-looking statements. These forward-looking statements include, among others, statements about the potential market opportunity resulting from the acquisition of the Sonoma-Cutrer and associated business strategy, the Company’s ability to better address certain markets, expand its capabilities and position in the industry and extend its product offerings to better serve our customers, the potential impact of the Company’s distribution network realignment, as well as the potential synergies and other financial benefits derived by and financial impact to the Company from the acquisition. All of our forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those that we are expecting, including: risks associated with transactions generally; the failure to consummate or delay in consummating the transaction for other reasons; the risk that a condition to closing of the transaction may not be satisfied; the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement; the outcome of any legal proceedings that may be instituted following announcement of the transaction; failure to retain key management and employees of Sonoma-Cutrer; issues or delays in the successful integration of Sonoma-Cutrer’s operations with those of the Company, including incurring or experiencing unanticipated costs and/or delays or difficulties; unfavorable reaction to the transaction by customers, competitors, suppliers and employees; unpredictability and severity of catastrophic events, including but not limited to acts of terrorism, war or hostilities, as well as management’s response to any of the aforementioned factors; and additional factors discussed in the Company’s filings with the SEC.
The forward-looking statements contained in this press release are based on management’s current plans, estimates and expectations in light of information currently available to the Company and are subject to uncertainty and changes in circumstances. There can be no assurance that future developments affecting the Company will be those that the Company has anticipated. Actual results may differ materially from these expectations due to changes in global, regional or local political, economic, business, competitive, market, regulatory and other factors, many of which are beyond our control, as well as the other factors described in Item 1A, “Risk Factors” in the Company’s 2023 10-K filed with the SEC on September 27, 2023, and the Company’s 10-Q for the quarter ended January 31, 2024, filed with the SEC on March 7, 2024, and other documents the Company may file with the SEC from time to time. Should one or more of these risks or uncertainties materialize or should any of our assumptions prove to be incorrect, our actual results may vary in material respects from what we may have expressed or implied by these forward-looking statements. Any forward-looking statement made by the Company speaks only as of the date on which it is made. All future written and oral forward-looking statements attributable to the Company or persons acting on the Company’s behalf are expressly qualified in their entirety by the previous statements. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by applicable securities laws.
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Investors
Ben Avenia-Tapper
IR@duckhorn.com
(707) 339-9232
Media
Jessica Liddell, ICR
DuckhornPR@icrinc.com
(203) 682-8200
Source: The Duckhorn Portfolio, Inc.
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