Good afternoon. Thank you for attending The Duckhorn Portfolio Q1 2023 earnings conference call. My name is Matt, and I will be your moderator for today's call. All lines will be muted during the presentation portion of the call for an opportunity for questions and answers at the end. If you would like to ask a question, please press * followed by 1 on your telephone keypad. I would now like to pass the conference over to our host, Sean Sullivan. Sean, please go ahead. Good afternoon, welcome to The Duckhorn Portfolio's Q1 2023 earnings conference call. Joining me on today's call are Alex Ryan, our President, CEO, and Chairman, and Lori Beaudoin, our Chief Financial Officer. In a moment, we will give brief remarks followed by Q&A. By now, everyone should have access to the earnings release for the fiscal quarter ended October 31st, 2022, that went out at approximately 4:15 P.M. Eastern Time. The press release is accessible on the company's website at ir.duckhorn.com. Shortly after the conclusion of today's call, a webcast will be archived for the next 30 days. Before we begin, I would like to remind you that today's discussion contains forward-looking statements based on the environment as we currently see it. As such, includes risks and uncertainties. If you refer to Duckhorn's earnings release, as well as the company's most recent SEC filings, you will see a discussion of factors that could cause the company's actual results to differ materially from these forward-looking statements. Please remember, the company undertakes no obligation to update or revise these forward-looking statements in the future. We will make a number of references to non-GAAP financial measures. We believe that these measures provide investors with useful perspective on the underlying growth trends of the business and have included in our earnings release a full reconciliation of non-GAAP financial measures to the most comparable GAAP measures. Please note that all total US food scanner data cited on today's call will refer to $ or unit consumption for the 12-week period ended October 30, 2022, and growth versus the same period in the prior year, unless otherwise noted. With that, I'll turn the call over to Alex. Thank you, Sean. Good afternoon, everyone. We really appreciate you joining us today to discuss our continued strong Q1 financial performance. Following my opening remarks, Lori will walk us through our quarterly results and also provide an update to our fiscal 2023 outlook. We will open the call for questions. In this period of uncertainty, with significant inflationary pressure and mixed economic indicators, we have continued to show strong growth well in excess of the luxury wine subsegment. Irrespective of the backdrop, the sound and consistent execution of our sales strategy, as well as our powerful brand equity, are further strengthening deep connections with customers. We are well-positioned to sustain our outperformance of the fastest-growing subsegment in our industry. With a focus on our execution and the momentum we seek to accelerate every day, I would like to begin today's call by offering a few highlights from the quarter. 1st, Q1 marked another all-time high in quarterly net sales, with particular strength observed in October. Organic net sales growth was up nearly 4%, which adds to a strong 14% growth rate comparison from the prior year period. This performance is even more remarkable when you consider the fact that Kosta Browne's Single Vineyard release was included in Q1 of the prior year, but will shift into Q2 beginning this year and remain in Q2 in all future fiscal years. 2nd, net sales were almost entirely driven by a 9% volume growth and continued to be led by our Duckhorn Vineyards and Decoy Winery brands. Our wholesale depletions growth was even stronger into the high teens, another example of the robust demand of our high-quality luxury wines. 3rd, the interconnectivity of our brands and our one-stop luxury wine shop go-to-market strategy continued to win as top-line growth remained broad-based. Excluding the impact of Kosta Browne's new shipping schedule, which removed all Kosta Browne's Single Vineyard Series release shipments from Q1, we realized strong performance that was balanced across the entire portfolio in all channels and across all key distribution metrics, cases, accounts sold, and points of distribution. 4th, in further reinforcing the strength of our portfolio and how well it resonates with our core luxury consumer, consumption trends remain very healthy. Within the fastest-growing subsegment of wine, $15 per bottle and above, The Duckhorn Portfolio was once again the fastest-growing amongst the 15 suppliers, up mid-teens in both dollars and units, and reflecting consistent rate of market share gains that is nearly 2x greater than any other supplier in luxury wine. 5th, in spite of shipment cadence headwinds from Kosta Browne, a winery that carries a higher gross margin than the company average, we delivered a consolidated adjusted gross margin that was up versus the prior year period, a testament to our ability to keenly manage cost of goods and take price where appropriate. Our calculated pricing actions, which primarily took place in early September through a combination of optimizing trade spend and thoughtfully increasing frontline prices, are increasingly flowing through the system. Thus far, we have not seen any dampening effect on demand and no sign of trade down within our portfolio, a likely reflection of our more affluent luxury consumers' ability to absorb modest and thoughtful price increases for our fine wines. Our performance this quarter showcases our continued ability to successfully execute on a multifaceted growth strategy. Beginning in wholesale, we recognize double-digit depletion growth in both on and off-premise channels, reflecting positive contribution from all key sales metrics, with particular strength in total accounts sold, which was up double digits in the quarter. As we discussed on our last earnings call, increasing new accounts is our primary focus for further penetrating the considerable wholesale distribution white space opportunity we have in front of us. Within this focus on new accounts, we believe our greatest growth opportunity is in the off-premise channel, which represents the majority of our current wholesale business. In addition to double-digit account growth, off-premise depletions were also bolstered by solid gains in both points of distribution and velocities per account. While off-premise sales were the greater driver of Q1 growth by channel, I am particularly proud of our team's on-premise execution. Against a significant year-over-year comparison, the on-premise channel still grew depletions by double digits, highlighting continued strong sell-through for our high-quality luxury wines, particularly as fine dining remains resilient. We believe we are well-positioned for ongoing share gains in the channel given our scale and distribution leverage, reputation as a reliable supplier within luxury wine, and our trade partners' confidence that our brands will sell. In addition, much like we have in the past, we will continue to make the strategic investments that we believe are needed to advance our growth agenda and fortify our competitive position. I'll now turn to our high-margin direct-to-consumer business, which is also performing well. In spite of shipment cadence headwinds for Kosta Browne, we see healthy trends in our wine club sales as we continue to impress our most loyal customers with new, innovative offerings by providing each visitor an exceptional luxury wine experience. As we move into the Q2, we feel good about how the direct-to-consumer channel is shaping up. Kosta Browne's impeccable track record of demand outpacing supply continues into the present with our Single Vineyard Series release providing the latest example of this dynamic. Now, for a moment, let me touch on 1 of my favorite areas, product innovation. I'm really excited about several of our new releases, including Decoy Brut Cuvée and Canvasback Red Mountain Merlot, as well as the solid pipeline of new product innovation coming to the market in the next few months. We have a rich history of successfully innovating within the luxury sub-segment. It is a strategic pillar that allows us to continue to outpace the industry, and we are confident that these new product introductions will be an important aspect of our continued growth. Before I turn things over to Lori, I want to comment on another important development today. As discussed in a press release this afternoon, Lori has announced her intention to retire as our Chief Financial Officer next spring. Lori's professionalism, intelligence, warmth, and moral character have been an inspiration to me and all of us at Duckhorn over the past 13 years. She's a strong leader with a clear vision, and she will leave this company strong and eager to take on the next set of opportunities. We would not be where we are today as a leading platform for high-quality luxury wines if not for Lori's sound leadership and dedication over her career with the company. She has truly been instrumental to the success of The Duckhorn Portfolio, and we are tremendously grateful. We are conducting a national search for our company's next CFO, and we expect Lori to continue as CFO until our new CFO joins us to ensure a seamless transition over the next few months. Lori also plans to serve as a senior advisor to the company after the transition, which will afford her thoughtful counsel into the future. With that, I'll now turn it over to Lori to discuss our Q1 performance and updated fiscal year 2023 outlook. Thank you, Alex. After a career spanning more than 40 years, I can unequivocally say that my time at The Duckhorn Portfolio has been the proudest period of my professional career. I am honored to have partnered with the immensely talented and dedicated team we have at this outstanding organization. Over the course of my more than 13 years here, we have grown this business tremendously and realized countless achievements. We have built on the foundation established by Dan and Margaret Duckhorn to make The Duckhorn Portfolio America's premier luxury wine company. Given the advantaged position in which we sit today, because of the innovative spirit and growth-oriented mindset shared across the entire company, I could not be more confident that The Duckhorn Portfolio will remain a driving force within luxury wine and continue to deliver profitable growth for years to come. With that said, my focus remains steadfast on the quarters ahead of us, I plan to work diligently with Alex, the rest of the executive team, and my eventual successor to ensure a seamless transition. Turning to our Q1 results and beginning with our top line, net sales were $108.2 million, a 3.8% increase in organic growth compared to the prior year period. These results reflect 9.2% growth in volume as continued execution in the on-premise and off-premise channels led to strong wholesale case growth, partially offset by -5.4% price mix. The decline in price mix was primarily a result of the previously discussed timing shift in the Kosta Browne shipment and to a lesser extent, the continued outperformance of our leading Duckhorn Vineyards and Decoy Winery brands relative to our other winery brands. As Alex noted earlier, Q1 depletions outpaced shipments as a number of key metrics, accounts sold, points of distribution, and velocity per account all contributed nicely to our growth. Let's focus for a moment on net sales performance by channel. Wholesale to distributor was our greatest contributor to growth, increasing 15.8% versus the prior year quarter. Both on and off premise were up double digits in the quarter, once again highlighting the strength of our portfolio and the consumer's continued desire for our high-quality luxury wines in all settings. In addition to our strong business fundamentals, we looked at the timing of shipments, particularly in October, and believe our outperformance relative to internal expectations reflects some pull forward from the Q2. I will discuss this in greater detail shortly. The California direct to trade channel was up 0.7% versus the prior year period. While this marks a moderation in trend, I'd point out our challenging year-ago comparison as Q1 fiscal 2022 recognized a material benefit from California's substantial reopening as the pandemic subsided. The direct-to-consumer channel was down 46.3% compared to the prior year quarter. This decline was entirely related to the Kosta Browne DTC shipment timing shift that we've noted a few times on the call already. To put this shift in context, if we excluded Kosta Browne shipments from last year's Q1 performance, DTC net sales would have grown nicely in positive territory, underscoring solid performance in our clubs and other tasting rooms. Q1 gross profit was $54.7 million, an increase of $2.3 million or 4.4% versus the prior year period. On an adjusted basis, gross profit grew to $55 million or 4.2% compared to the prior year period. This represents a 50.8% adjusted gross margin, up approximately 20 basis points year-over-year, as negative channel mix from a decline in our higher margin DTC business was more than offset by margin improvements within our wholesale channels. Total selling, general and administrative expenses were up $2.5 million or 10.9% versus the prior year period. The increase was in line with our expectations and driven primarily by increased growth investments to support the pursuit of our considerable wholesale distribution whitespace opportunity and continued execution against our overall long-term strategy. On an adjusted basis, which excludes transaction-related expenses and non-cash equity-based compensation, total operating expenses increased by $4.6 million or 25.7%. Net income was $19.8 million and diluted EPS was $0.17 per share, compared to net income of $21.3 million and $0.18 per diluted share in the prior year period. Adjusted net income came in at $20.5 million, and adjusted EPS was $0.18 per diluted share, compared to $23.5 million and $0.20 per diluted share in the prior year period. Adjusted EBITDA for the quarter decreased 6.4% to $35.7 million. This represented 33% of net sales, compared to 36.6% of net sales in the prior year period. The reduction reflects planned growth investments in the quarter, as well as the timing shift in Kosta Browne DTC shipments out of Q1. At the end of the quarter, we had cash of $5.3 million and total debt of $206.2 million, resulting in a leverage ratio of 1.6 times net debt. Regarding our outlook, we are reaffirming our guidance for fiscal year 2023, which calls for net sales of $393 million to $401 million, reflecting approximately 5.5% to 7.5% organic volume-led growth. Adjusted EBITDA of $132 million to $137 million and adjusted EPS of $0.62-$0.64 per share. We are making a few updates to certain assumptions underlying our full year guidance, though, namely interest expense and adjusted gross margin. For interest expense, given the continued rise in interest rates, we now expect approximately $13.5 million to $14.5 million, up from $11 million to $12 million previously. To reflect our Q1 outperformance, we now expect adjusted gross margin for fiscal 2023 to be flat to down approximately 50 basis points, an improvement from our prior guidance of down 50-100 basis points year-over-year. There are no other changes to our margin assumptions. We still expect planned pricing to cover inflation and a greater year-on-year contribution from our other winery brands, on 1 hand, will be offset by continued outperformance in growth from the Duckhorn Vineyards and Decoy Winery brands, on the other hand. There are no changes to our strategic growth investment plans for fiscal 2023. Our current set of investments should enable us to continue to execute against our multiyear wholesale distribution opportunity and scale profitably over time, further expanding our competitive moat and cementing Duckhorn's leading position within the luxury wine industry for the long term. Aside from the full year guidance offered on our last call, we also provided detailed quarterly net sales guidance given a new delivery cadence for our ultra-luxury high-margin Kosta Browne wines. As we sit here today, we are on plan with Kosta Browne shipments and remain confident that we can produce outsized growth embedded in our guidance for the H2, both in wholesale and DTC, and particularly in Q4. That said, as we signaled in September, variability in monthly wholesale performance can influence any given quarter, particularly during times of economic uncertainty. Based on stronger than anticipated growth observed late in the Q1, we do believe a portion of net sales outperformance was pulled forward. As such, we are tempering our net sales growth expectations for the Q2 to up low to mid-single digits from up mid to high single digits. However, our guidance for the full fiscal year remains unchanged. Overall, we are very encouraged by the Q1, and we look forward to continued success throughout fiscal year 2023. I will now turn the call back over to Alex for closing comments. Thank you, Lori. We are off to a great start to the year and on pace to meet our fiscal year 23 guidance. Regardless of external factors, we are delivering strong results and executing upon 5 strategic growth priorities. 1st, we are procuring ample supply of high-quality fruit that meets the standards for our luxury wines through our highly diversified supply chain. 2nd, we are leveraging our scaled omni-channel platform to engage with consumers and continue to build brand awareness. 3rd, we are deploying our differentiated one-stop luxury wine shop sales approach to meet the fine wine needs of all trade partners. 4th, we are thoughtfully innovating to continuously refresh the portfolio and deliver exciting new offerings as a means to ensure strong, consistent growth. 5th, we are investing from a position of strength to drive sustainable penetration of our considerable wholesale distribution white space opportunity, which should support continued outperformance of the fastest-growing subsegment of wine luxury, as well as our long-term target of high single-digit organic net sales growth at highly attractive margins. With that, Lori, Sean, and I are available to take your questions. If you would like to ask a question, please press * followed by 1 on your telephone keypad. If for any reason you would like to remove that question, please press * followed by 2. Again, to ask a question, press * 1. As a reminder, if you're using a speakerphone, please remember to pick up your handset before asking your question. We will pause here briefly as questions are registered. The 1st question is from the line of Kevin Grundy with Jefferies. Your line is now open. Hi, this is Noah on for Kevin. Could you guys comment on trends you've seen more recently in October, November, with Nielsen suggesting some slowdown, as well as comment on general trends for premium wine in the category more broadly? Thanks. Yeah, Noah, sure. I'll take that. You know, think back a little bit just to look at, you know, that data is, you know, represents largely about 1/3 of our overall business, so we need to take that into context. The category is slowing a little bit. You know, we've all seen the same data, so let's just identify that. We continually are progressing significantly higher than the category and the competitors within the category, so we feel we're in an advantaged position there. Frankly, the 3-year trends are a lot more stable than the short-term trends. I just don't, we can't look at 2-year trends and call the industry. We still are confident we're gonna continue to outperform, hit our growth rates, and stay, you know, in front of our competitors on that. Hope that gives a little context to how we're looking at it. Do you have a follow-up on that? No, I'm good. Thank you, guys. Thanks. Thank you for your question. The next question is from the line of Peter Galbo with Bank of America. Your line is now open. Hey, guys. Good afternoon. Congrats to Lori. Thank you, Peter. Alex, I found your comments on the on-premise pretty interesting, you know, still at kinda a double-digit depletion, even with some of the slowness we've seen, particularly at the high end of fine dining. Can you just kinda tell us what you're seeing? 'Cause that would seem to break trend with a lot of the other data. I don't know if that's, you know, you guys have obviously taken a lot of share in the on-premise, if it's more that or if there's something, you know, else that you're seeing in that on-premise business. Peter, we're seeing success, right? We've been meeting with our customers where they wanna be met. The brands taste good, they're priced correctly. We've been very aggressive in making sure we position ourselves with the right partners, our wines are selling. There's a confidence, both on-premise and off-premise, I think it applies equally. We kept investment up in our on-premise sales teams throughout the pandemic. We were really well poised when things came back to be front and center of our customers. We take that responsibility really seriously, and I think what you're seeing is successes in that, in that focus. Great. No, that's helpful. Maybe just as a follow-up, Alex, just give you a little bit more time to talk about some of the innovation, the Canvasback and Decoy, just when we might start to see that roll out more in retail, how, you know, how that much that's embedded in your growth plans now. Is it incremental to this year, or is it more of a fiscal 2024 event? Just any more color you can provide there. Thanks very much. No, you know, we try not to make silver bullets. We try to make a combination of really successful pieces to the puzzle. You should expect to see those impacts really in the H2 and then continuing beyond that as we grow them. They're not incremental to our plan. You know, we planned for them. We knew we were making them. We strategically made them. They're not, they're not outliers. They're embedded in the overall plan. I think most of the impact this year will be H2 and into the future. Remember, as you know, we've talked about many times, innovation keeps our customers excited, keeps my employees excited, keeps the market excited. That is just as Innovation is a long-term strategy to excite and bring up the average bottle price of our customers going forward. This is just this year's implementation of that. Yeah, Peter. Hi, this is Lori. I just might add, you know, we've been releasing our Decoy Limited over time, several releases of those varietals, and we've seen great success with that. You know, we, when we release a new wine, especially a wholesale wine, we anticipate it will take about 3 years to completely be integrated and reach what we're thinking as a point where we won't be seeing significant year-over-year growth. We continue to reap the benefits from these new product innovations for years into the future. Great. Thanks very much. Look forward to trying them. Absolutely. Holidays coming. Thank you for your question. The next question is from the line of Andrea Teixeira from J.P. Morgan. Your line is now open. Hey, this is Drew Levine for Andrea. Thank you for taking the questions, and Lori, our congratulations as well. I wanted to ask on the guidance. Clearly, the Q1 came in better than expected, and you noted some potential pull forward from October. On the other hand, I think Alex mentioned wholesale depletions were running high teens. I'm just curious, you know, is there anything? I mean, I guess that would seem to suggest that distributor inventories are being depleted faster. I'm curious why some more, I guess, conservatism on the Q2. Is there anything you're seeing from a consumer perspective? It didn't sound like that, just any more thoughts on the guidance there. Thank you. Sure. Yeah. As, as you mentioned, we are, we did see for Q1 was a volume driven growth. We're estimating that about half of the outperformance is pulling into Q1 from Q2. We're, you know, the outperformance really was a function of strong direct-to-distributor depletions and then price as well. When we were originally doing our planning, we were thinking our price increases, which were really effective mid-quarter, that those would not really impact the quarter much at all. We figured our distributors would bring in heavy prior to these changes taking into effect, and that's not what we saw. We saw distributors buying at their normal cadence. We've seen depletions really exceeding our expectations, and then the distributors really ordering heavy towards the end of the quarter. That's what's giving us really the thought process that some of that pulled forward from what we had originally planned to ship in Q2. We're not seeing any decline in demand at all. We're seeing great, as I said, depletions continue, so no concern at all from the pricing changes that we implemented. keep in mind that there is always some level of variability in the timing of wholesale sales. we're cognizant of that just as Lori mentioned, as it relates to Q1, that can occur again in the, you know, as we get to the border of the next Q2 into Q3. we wanna be cognizant of that in how we look at things. Thanks so much for the color. Then just as a follow-up on the California direct-to-retail channel, not taking anything away from the performance, obviously, against a tough comparison, but the 3 year did decelerate a bit in the quarter, obviously a more developed market for Duckhorn. Just curious if there's anything else from a consumer perspective that you're seeing maybe in California relative to the rest of the United States? Hey, Drew, that's a great question. I think we had reported this on some earlier reportings. We had a bulk wine shipment, a bulk wine sale built in to the quarter of the prior year. It's unusual. We don't normally do a lot of bulk wine sales, but from time to time, to manage quality, we will do that. If you exclude that somewhat unique item, we were up a high single digits in the state of California, the largest wine consuming state in the union. Just to put a clarifying point on that, I think our results in California were really, really healthy for the luxury bottled wine sales that were typically, you know, that we do as our core business. Okay. Thanks so much for that, color. Appreciate it, and congratulations, Lori. Thank you. Thank you for your question. The next question is from the line of Greg Porter with Evercore. Your line is now open. Hey, guys. Thank you for taking the call. I was wondering if you could provide any more color on how you're thinking about the CFO search, you know, internal versus external, and just kind of any more color you can provide there. Thanks. Yeah. As you would expect, first of all, Lori is gonna remain in the CFO position until we've hired someone and, you know, been integrated, there's no, you know, lapse in anything. We're very confident that we have full support and coverage until that time. We've hired a national search firm. 1 of the, you know, significant items they're gonna be looking for is public company experience, a solid public company experience, to help us take this company for the next several years into the future. I think we've covered all the important parts that we need and that the market's gonna need from us. Great. Just 1 other quick follow-up. I saw in the press release that the underlying, you know, price mix without the impact from the Kosta Browne shift was flattish. Is there any more color you can provide, I guess? I know the track channel numbers have been around 2%. Is that sort of what you're seeing, and do you think that level of pricing is gonna sustain through the end of the year, you know, or do you expect that to kinda ramp or decline based on the cadence that you have planned out? Greg, we don't really break out price, separately from brand, so we have price mix. We did see in the quarter, so as we had anticipated, the DTC would impact our margins for sure, and that's actually what we saw. Our margins didn't decline to the extent that we thought they would, mostly because of, we experienced a little earlier benefit from the pricing changes than we anticipated, as I mentioned earlier. Also we had really strong brand mix, which helped offset some of that that we hadn't anticipated. I think another point to take into account is that we've seen 0 pushback on our pricing changes, into the Q1 and, you know, the beginning of this fiscal year. We're confident that we made the right ones at the right time, and we do expect those to continue to flow through the performance for the year. Great. Thanks, guys. Thanks, Greg. Thank you for your question. The next question is from the line of Kaumil Gajrawala with Credit Suisse. Your line is now open. Thank you. Hey, everybody. Laurie, congratulations. Thanks for all your help, especially around the IPO. I don't think any of us on this call were that easy on you, and you managed it well. Appreciate all of the effort. Maybe I'll just start with a CFO question as well on margins. I believe you said that you saw improving margins within specifically the wholesale channel. Can you maybe just talk about what's going on there and how you were kind of able to improve margins on that part of the business? Maybe just some context on what perhaps the spread looks like on your California business versus your wholesale business. Yeah. Kaumil, what we saw is we saw more sales in our wholesale channel than we had anticipated. What I was referring to with regard to the spread was more so that we had anticipated our distributors would bring in heavy prior to our price changes. The price changes were effective mid-quarter. We didn't see that behavior. We saw kind of business as usual. We also saw heavier buy-in towards the end of October, the end of our quarter. We recognized greater benefit from that in the quarter than we had anticipated. You know, recall how we implement our pricing changes, right? We have multiple ways we can do it. 1 is through reducing trade spend. 1 is through changing our frontline price. The majority of this price changing was implemented through changing our trade spend. Oh, got it. Okay. I forget. There was a 2nd- And- Go ahead. Go ahead, Kaumil. Well, I was curious what it looked like the, or what it looks like now, the margin differential between your, direct to your California business versus your wholesale business. Oh, sure. Yeah. As we've been talking for the past 2 years, our direct to trade in California is our 2nd highest margin business, right? Direct to consumer is the highest margin business we have. Within California, where direct to trade is the 2nd highest margin, and then the direct to distributor coming in 3rd. Also remember, as we talk about, we have different operating expenses across those 3 channels as well, with the highest operating expense being in our DTC business, the 2nd being in California, because we have a lot more people out selling our wines than with the other 49 states. When it comes right down to contribution, they're quite similar in terms of contribution to the bottom line between those channels. Okay, got it. Thank you. Thank you, Kaumil. Thank you for your question. There are currently no further questions registered, so as a reminder, it is * 1 on your telephone keypad. There are no additional questions waiting at this time, so I will pass the conference over to the management team for any closing remarks. All right. I wanna thank you again for joining us today to review our Q1 performance and our updated outlook for the remainder of the fiscal year. I look forward to speaking with you again in early March, when we report our Q2 2023 results. Until then, on behalf of the entire Duckhorn Portfolio, I'd like to wish you a safe and happy holiday season. Take care and talk to you soon. That concludes the conference call. Thank you for your participation. You may now disconnect your line.