Corby Spirit and Wine Q4 Earnings Call Highlights

Key Points

• Record fiscal 2026 performance: Revenue rose 10% to C$271.6 million, while adjusted operating earnings increased 12% to C$53.7 million and adjusted EPS climbed 15% to C$1.23.
• RTDs drove growth: The portfolio delivered 18% volume growth versus 7% for the category, with RTDs now representing about 40% of revenue. Cottage Springs remained Ontario’s leading RTD brand, while Corby raised its ABG ownership to 95%.
• Strategic focus and cautious outlook: Corby sold Lamb’s rum for C$39.2 million, renewed its Pernod Ricard agreement through 2029 and raised its quarterly dividend 4%. Management expects fiscal 2027 uncertainty from potential U.S. product returns and tougher comparisons.

Corby Spirit and Wine TSE: CSW.A reported record fiscal 2026 results, with revenue rising 10% on a reported basis and 11% organically as ready-to-drink beverages, or RTDs, continued to gain momentum and the company expanded share in spirits.

For the year ended June 30, 2026, revenue reached C$271.6 million. Adjusted earnings from operations rose 12% to C$53.7 million, while adjusted earnings per share increased 15% to C$1.23. Reported earnings per share rose 22% to C$1.17.

President and Chief Executive Officer Florence Tresarrieu said the results reflected the company’s portfolio and commercial execution amid a challenging market. She said RTDs now account for about 40% of Corby’s revenue and described the business as one of the company’s principal growth drivers.

RTD Growth Outpaces Category

Corby said its RTD portfolio delivered 18% volume growth nationally over the past 12 months, compared with 7% growth for the category. The company attributed the performance to product innovation, expanded distribution and route-to-market initiatives.

In Ontario, Cottage Springs maintained its position as the No. 1 RTD brand, according to Tresarrieu, including the top position in grocery and SBU channels. She said Cottage Springs gained market share across every channel during fiscal 2026.

In Western Canada, ABG increased volume by 14.3% while the RTD category declined 2.7%, management said. Corby increased its ownership interest in ABG to 95% during the fiscal year and exited non-core RTD and beer brands to streamline the business.

The company also pointed to innovation in Ontario, where Cottage Springs Vodka Soda Freezie and Candy Keys Bag-in-Box held two of the top three innovation positions. J.P. Wiser’s Canada Dry RTD also ranked among the province’s leading innovations, according to management.

Fourth-Quarter Results Affected by LCBO Timing

Fourth-quarter revenue was C$71.1 million, down 1% from the prior-year period. Organic revenue was flat after excluding the effects of disposed brands. Chief Financial Officer Juan Alonso said the quarter was affected by unfavorable LCBO order phasing after orders had been pulled into the third quarter ahead of an ERP system upgrade.

Domestic case goods revenue, which represented 81% of fourth-quarter net sales, declined 3% on a reported basis and 2% organically to C$57.7 million. Management said RTD growth, LCBO pricing changes, route-to-market modernization and spirits share gains partly offset the effect of order timing.

Fourth-quarter export revenue increased 37% to C$5.2 million, supported by U.S. and U.K. shipment growth. Total commission revenue declined 5% to C$7.3 million, reflecting softer performance in imported spirits, RTDs and wines, partly offset by the addition of the Canada Dry Mott’s RTD portfolio.

Adjusted earnings from operations in the fourth quarter rose 3% to C$11.8 million. Adjusted earnings per share were C$0.26, down 1%, while reported earnings per share increased 4% to C$0.23. Cash from operating activities increased by C$2.2 million from a year earlier to C$17.7 million.

Portfolio Actions and Pernod Ricard Renewal

Subsequent to year-end, Corby completed the sale of the Lamb’s rum brand for aggregate consideration of C$39.2 million. Tresarrieu said the transaction would allow the company to focus capital and resources on higher-return opportunities and priority growth platforms.

Corby also renewed its representation agreement with Pernod Ricard for three years through September 2029, with the potential for an additional two-year extension subject to the agreement’s terms. The unchanged agreement maintains Corby’s exclusive Canadian rights to represent brands including Absolut, Jameson and The Glenlivet.

Asked about the agreement during the question-and-answer session, Tresarrieu said its structure remained unchanged and called the renewal evidence of the companies’ relationship of more than two decades.

Balance Sheet, Dividend and Outlook

Cash from operating activities for the full year was C$37.1 million, down C$7.7 million from fiscal 2025, due to higher receivables, RTD inventory and income tax payments. Net debt declined C$2.6 million to C$88.4 million following loan repayments, and the company’s net debt-to-adjusted EBITDA ratio improved to 1.3 times from 1.4 times a year earlier.

Corby declared a quarterly dividend of C$0.25 per share, up C$0.01, or 4%, from the prior quarter. Total dividends declared for fiscal 2026 were C$0.96 per share, a 5% increase from the prior year.

For fiscal 2027, management said it expects continued uncertainty, including the potential return of U.S. products to Canadian shelves and tougher comparisons following fiscal 2026’s performance. Alonso said the company expects the gap between its spirits share gains and the broader market to narrow if U.S. products return.

Tresarrieu said Corby will focus on investing behind core brands and RTD momentum, maintaining cost discipline, protecting margins and managing the business through changing market conditions.

About Corby Spirit and Wine (TSE:CSW.A)

Corby Spirit and Wine Ltd is a Canadian manufacturer, marketer and importer of spirits and wines. The company derives its revenues from the sale of its owned-brands in Canada and other international markets, as well as earning commissions from the representation of selected non-owned brands in the Canadian marketplace. The company also supplements these primary sources of revenue with other ancillary activities incidental to its core business, such as logistics fees. The company has two reportable segments: Case Goods and Commissions.

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