Crimson Wine Group Revenue Jumps 65% to $21.966 Million Despite Quarterly Loss
Key Facts
Crimson Wine Group posted a net loss of $292,000, or $0.01 per share, in the three months ended September 30, 2026, after reporting net income of $943,000, or $0.05 per share, in the same period a year earlier. The result came despite a 65% increase in quarterly net sales to $21.966 million from $13.317 million. Company filings with the U.S. Securities and Exchange Commission showed that growth coincided with a clear shift in the sales-channel mix, as wholesale sales surged while direct-to-consumer sales fell. Gross profit rose, but its margin narrowed, while operating expenses increased and other income declined from a year earlier. The quarterly loss thus came amid rapid sales expansion that did not translate into net income.
Wholesale sales reached $15.601 million, up 151% from the third quarter of 2025, when they totaled $6.223 million. The company attributed the increase mainly to Raeburn wine shipments following its acquisition of the brand’s assets on February 9, 2026. Domestic wine sales rose $9.1 million, while export sales increased $0.3 million from the same period a year earlier. Wholesale was therefore the largest driver of quarterly revenue growth, with Raeburn adding to the company’s recorded shipments. But the acquisition’s effect extended beyond higher sales: the acquired inventory carried a higher accounting cost that weighed on wholesale margins during the quarter.
By contrast, direct-to-consumer sales fell 9% to $5.580 million from $6.153 million a year earlier, a decline of about $0.6 million. The company said the decline in wine club memberships was the main driver. Tasting room and e-commerce sales remained similar to their levels in the year-earlier quarter, according to the filing. The divergence highlights the reliance of quarterly revenue growth on wholesale shipments, while the direct sales channel did not post comparable growth. That came despite an increase in total sales, as the channels moved in different directions.
Gross profit rose 54% to $9.677 million from $6.289 million in the year-earlier period, but gross margin fell to 44% from 47%. The company said the higher accounting cost basis of acquired Raeburn inventory reduced wholesale margins by 685 basis points during the quarter. It added that the inventory-related pressure is expected to continue until the inventory is sold. Meanwhile, operating expenses rose 32% to $9.819 million from $7.460 million. The expenses included $5.387 million for sales and marketing and $4.432 million for general and administrative expenses, adding to the earnings burden as activity expanded.
Net interest expense also rose 72% to $387,000 from $225,000 a year earlier. Net other income fell 96% to $98,000, after the year-earlier period included a $2.5 million insurance settlement related to the 2017 wildfires. The company said the decline in other income, driven mainly by the absence of that large settlement, contributed to the weaker year-over-year comparison. For the nine months ended September 30, net loss was $1.268 million, compared with a loss of $124,000 in the same period of 2025. The nine-month figures show the quarterly loss as part of weaker cumulative performance than a year earlier, alongside acquisition expenses and a shift in the components of income.
On liquidity, net cash provided by operating activities totaled $13.265 million in the first nine months of 2026, compared with $3.141 million in the same period of 2025. Borrowing availability under the revolving credit facility was $41.0 million as of September 30. Management also said existing liquidity, operating cash flows and borrowing arrangements are expected to support the company’s ability to meet anticipated financial obligations over the next twelve months. The company paid $35.207 million to complete the purchase of Raeburn assets and recorded $2.326 million in capitalized transaction costs, bringing the estimated cost basis to $37.533 million. This investment provides context for the acquisition’s effect on quarterly margins, as well as its role in increasing wholesale shipments.
Management said the company’s seasonal sales pattern typically includes lower sales and net income in the first quarter and higher levels in the fourth quarter, driven by holiday purchases and the timing of wine club shipments. It said it expects similar seasonal trends to continue while it monitors the effects of the Raeburn acquisition. In the November 11 session, EL7 data showed the stock closing at $3.86, after closing at $3.85 on November 10 and $3.90 on November 6. These prices showed no sharp daily move in the latest recorded session, while the decline cited in Zacks’ headline does not cover the same period as these closing prices. Zacks published its results report on November 12, after the quarter ended on September 30.