The Duckhorn Portfolio Appoints Interim CEO and Industry Veteran Deirdre Mahlan as President and Chief Executive Officer - Seite 2

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 $5 million annually, with further potential to drive incremental net sales growth. The Company expects the addition of Sonoma-Cutrer to extend the Company’s reach to a broader base of consumers and trade partners, further enabling The Duckhorn Portfolio to outpace industry growth.

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 $91 million to $93 million. These results reflect continuing softness in the wine market and a lower-than-expected response rate to the Company’s Kosta Browne appellation series offering. While consumer demand softness continues, the Company remains focused on delivering profitable growth that outpaces the industry. The Company anticipates that third quarter Adjusted EBITDA margins will be broadly in line with its fiscal year-to-date trend as it continues to exercise strict cost controls. The Company expects to provide an updated financial outlook for full year fiscal 2024 on its third quarter earnings call to be held Thursday, June 6, 2024.