Diamond Estates Wines & Spirits Inc. Announces Q3 2026 Financial Results

Executive Summary

• Diamond Estates reported Q3 2026 revenue of $8.2 M, up $1.8 M YoY, with gross margin improving to 59.8% (up from 57.5%).
• Net income swung to a loss of $0.1 M versus a profit of $0.5 M in Q3 2025, driven by one‑time items and higher SG&A expenses.
• The company resolved a regulatory compliance matter incurred in Q1 2026 at nominal cost, with total professional fees of ~$0.5 M for the period and has implemented enhanced internal controls.

Key Details

• Revenue: $8.2 M (Q3 2026) vs. $6.4 M (Q3 2025).
• Division Performance:
• Winery division sales +$1.9 M, driven by grocery, convenience and big‑box growth plus VQA Support Program enhancements.
• Agency division sales –$0.1 M, primarily due to lower consignment sales.
• Gross Margin: $4.9 M (59.8% of revenue) vs. $3.7 M (57.5%) YoY; excludes Wine Sector Support Program rebates for Q3 2026.
• SG&A Expenses: $4.3 M (+$1.2 M YoY), reflecting VQA support payments, higher advertising, promotional and compliance costs.
• Adjusted EBITDA: $0.7 M (up $0.1 M YoY).
• EBITDA: $0.7 M (down $0.7 M YoY) – impacted by Perigon contingent consideration, share‑based compensation, compliance expenditures and timing of Wine Sector Support Program payments.
• Net Income: Loss of $0.1 M vs. profit of $0.5 M in Q3 2025.
• Cash Flow from Operations (YTD 2025): $2.3 M generated before working‑capital changes; after adjustments, $3.9 M generated versus a $0.1 M outflow the prior year.
• Regulatory Compliance Review:
• Issue identified in Q1 2026 involving purchase orders/invoices submitted under non‑initiating customer names.
• Resolved in Dec 2025 to wholesaler’s satisfaction; nominal financial impact.
• Professional fees incurred: ~$0.1 M (Q3 2026) and $0.4 M YTD.
• New internal controls, governance processes, and compliance oversight measures implemented.
• President’s Message Highlights:
• Strong revenue growth and industry‑leading gross margins.
• Record 2025 grape harvest ( >2× 2024 volume) and largest recent ice‑wine harvest.
• Development of three‑year strategic plan underway.

Notable Quotes

“I am very pleased with the continued improvement in our business, highlighted by strong revenue growth, industry‑leading gross margins… Our leadership team is in the final stages of developing our next three‑year strategic plan.” – President & CEO Andrew Howard

Materiality Assessment: Material – Neutral (the release contains comprehensive quarterly financial results and a material compliance matter that could affect investor perception).