Crimson Wine Group, Ltd. reported its financial results for the nine months ended September 30, 2024, revealing a slight decline in net sales and profitability compared to the same period in 2023. Total net sales for the nine months were $50.1 million, down from $51.0 million, reflecting a decrease of $881,000 or 2%. The decline was primarily attributed to a 4% drop in wholesale net sales, which fell to $27.9 million from $29.1 million, driven by reduced domestic and export demand. In contrast, direct-to-consumer sales increased by 1% to $19.1 million, supported by higher sales in tasting rooms and eCommerce channels.

For the third quarter, net sales decreased to $16.9 million from $18.0 million, a 6% decline. The wholesale segment saw a 13% drop in sales, while direct-to-consumer sales rose by 5%. Gross profit for the nine-month period increased to $24.6 million, up 3% from $24.0 million in 2023, with wholesale gross profit rising by 6% due to a favorable sales mix. However, direct-to-consumer gross profit decreased by 3%, reflecting a shift in sales channels.

Operating expenses increased significantly, with total operating expenses for the nine months rising to $25.7 million from $23.9 million, primarily due to higher sales and marketing costs. As a result, the company reported an operating loss of $1.5 million for the nine months, compared to a profit of $35,000 in the prior year. Net loss for the nine months was $467,000, a stark contrast to the net income of $1.6 million in 2023.

Crimson Wine Group's cash and cash equivalents increased to $24.3 million as of September 30, 2024, from $22.8 million at the end of 2023. The company also reported a net cash inflow from investing activities of $1.9 million, a significant improvement from the $6.6 million outflow in the previous year. The company continued its share repurchase program, buying back 324,602 shares at an average price of $5.91 per share during the nine months.

The company is currently assessing the impact of the new accounting standard ASU No. 2023-07 on its financial statements and disclosures. Additionally, a cybersecurity incident was detected in June 2024, but the company believes it has not materially affected its financial condition. Overall, while Crimson Wine Group faced challenges in sales and profitability, it managed to maintain a strong cash position and continued its strategic initiatives.