Good morning. Thank you for attending today's Duckhorn Portfolio Q3 2023 Earnings Conference Call. My name is Jason, and I'll be the moderator for today's call. All lines will be muted during the presentation portion of the call, with an opportunity for questions and answers at the end. If you'd like to ask a question, please press star one on your telephone keypad. I would now like to pass the conference over to our host, Sean Sullivan. Good afternoon, welcome to The Duckhorn Portfolio's Third Quarter 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 April 30th, 2023, that went out at approximately 4:05 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, and 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. In addition, please note that all total U.S. food scanner data cited on today's call will refer to dollar or unit consumption for the 12-week period ended April 30th, 2023, and growth versus the same period in the prior year, unless otherwise noted. With that, I will turn the call over to Alex. Thank you, Sean. Good afternoon, everyone. Thank you for joining us today to discuss our solid third quarter financial performance. Following my opening remarks, Lori will walk us through our quarterly results and upwardly revised fiscal year 2023 financial outlook. She will then turn the call to Sean, who will discuss an exciting M&A development. At the end of our prepared remarks, we'll open the call for questions. I would like to begin today's call by offering a few highlights from the quarter. First, from a top-line perspective, we performed in line with our expectations, as wholesale drove high single-digit net sales growth, while DTC declined due entirely to previously discussed shifts in the timing of our club around offerings between fiscal Q3 and Q4. Absent these changes in offering timing, DTC would have been up modestly. Second, our volume grew by 3.5%, generally consistent with our first half performance. Depletion growth moderately trailed shipment growth. We continued to make good progress on our considerable distribution white space opportunity, as both accounts sold and the number of labels per account contributed positively in the quarter. Third, our portfolio remained a category growth leader within the $15 per bottle and above luxury sub-segment of wine, despite a challenging macroeconomic environment weighing on near-term consumer discretionary spending. Mid-single-digit consumption growth and continued market share gains were once again led by Duckhorn Vineyards and Decoy. Of note, Decoy Limited experienced over 15% dollar growth, showcasing the strength of the overall Decoy brand and its ability to extend into higher price points and address new consumption opportunities. We have always prided ourselves on our Merlot wines. We could not be happier with the response to our recent Decoy Limited Merlot release. Fourth, in spite of the gross margin headwinds, the Kosta Browne timing shift posed in the quarter, once again, we managed to generate strong adjusted EBITDA growth, supported by robust adjusted gross margin expansion and sound expense control. Let's look at on and off-premise dynamics. Off-premise performance moderated relative to our second quarter. We continued to realize solid contributions from several key metrics, including accounts sold and number of labels per account, which we attribute to our ongoing investments in our sales force, the appeal of our one-stop luxury wine shop model, as well as the quality and brand strength of our portfolio of fine luxury wines. Third quarter on-premise growth was challenged by somewhat slower dining activity, especially when lapping tough prior year comparisons that benefited from the continued on-premise reopening. However, we still grew our account base, and as we have discussed in previous earnings calls, getting into new accounts is a top priority for us as we seek to further penetrate the considerable wholesale distribution white space opportunity we have identified. Furthermore, labels per account growth was generally consistent with prior quarters, reinforcing our view that restaurateurs continue to consider us a trusted partner within luxury wine. I'll now turn to our high-margin direct-to-consumer business, which performed solidly in line with our expectations for the quarter. As previously communicated, our Kosta Browne Appellation Series offering, our highest volume Kosta Browne offering, shifted into the fourth quarter, while the more limited, higher-tier Estate Series offering shifted into the third quarter. While this shift negatively impacted our third quarter performance, we look forward to the fourth quarter, when our DTC channel performance will realize the benefits from the timing shift of the Appellation Series. The channel was down overall for the third quarter, we continually see healthy trends in our club sales as these exclusive and bespoke offerings consistently please our dedicated wine enthusiasts. Additionally, despite the inclement weather during the quarter, which resulted in closures as well as generally unfavorable conditions, the performance of our tasting rooms was quite encouraging, reflected in net sales growth and higher average dollar spend per customer. Our bookings for the summer are also looking good, and we are excited to continue capitalizing on these positive trends. Last month, we announced that we signed an agreement to acquire a production winery and planted vineyards in Alexander Valley, Sonoma County. The acquisition will bolster our production capacity and provide the company with a fully operational and modern facility with state-of-the-art winemaking equipment appropriate for luxury wines. In addition to the production facility, the property also includes seven acres planted to Cabernet Sauvignon. Sean and Lori will be discussing this in more detail later in the call. Before I turn the call over to Lori, I'd like to update you on our CFO search process. At the end of May, we are pleased to announce that we have hired Jennifer Fall Jung as our next Executive Vice President and Chief Financial Officer. I cannot be more excited to welcome Jennifer to The Duckhorn Portfolio, given her strong financial acumen, deep operational experience, and proven track record of developing and leading successful strategic efforts at iconic consumer products companies like Funko and The Gap. On behalf of the entire Duckhorn family, I would once again like to thank Lori for her leadership, dedication, and immeasurable contributions to The Duckhorn Portfolio over her 14-year tenure with the company. We would not be where we are today if not for Lori's steady hand, guiding the company through a global recession, pandemic, IPO, and countless other challenges, while also instilling a culture of discipline and accountability along the way. Lori leaves The Duckhorn Portfolio well positioned for continued success, not only as a public company, but also as an established industry leader in luxury wine. We are deeply grateful for everything that she has done and wish her the best in her retirement. I'll now hand it over to Lori to discuss our third quarter performance and updated fiscal year 2023 outlook in greater detail. Thank you, Alex. Good afternoon, everyone. It's a pleasure to be speaking with you on what is officially my final earnings call as CFO of The Duckhorn Portfolio. My 14 years here have been the proudest period of my long career, and I truly value the immensely talented and dedicated team we have at this incredible organization. Based on Jennifer's extensive experience and our interactions to date, I have the utmost confidence in her ability to fill my role effectively. Over the course of the next several weeks, I will work diligently with her to ensure a seamless transition. Upon my official retirement, I will remain available in an advisory role. I am pleased to be retiring at a period of strength for the company and firmly believe The Duckhorn Portfolio will continue to grow and remain a driving force within luxury wine for many years to come. I will now turn to our third quarter results. Beginning with our top line, net sales were $91.2 million, a 0.4% decrease in organic growth compared to the prior year period, and consistent with our expectations. Results reflected negative price mix contribution, mainly attributable to the expected decline in the DTC channel, partially offset by 3.5% growth in volumes and planned price increases. The decrease in our high-margin DTC channel resulted from the previously mentioned shift in cadence of the Kosta Browne Appellation Series, our largest-ever Kosta Browne offering, from the third quarter into the fourth quarter. At the same time, our more limited, higher-tier Estate Series offering shifted from the fourth quarter into the third quarter. Absent these timing shifts, we would have seen low double-digit net sales growth overall for the quarter, which speaks to the health of our business. As Alex noted earlier, third quarter wholesale shipment growth modestly outpaced depletion growth. Depletions growth continued to be driven by accounts sold despite the challenging backdrop, and to a lesser extent, number of labels per account, while the growth in our velocity per account tempered. Turning to net sales performance by channel. The wholesale to distributor channel returned to growth in the quarter, increasing 10.3% over the prior year period, representing our strongest growth contributor. The channel saw improvement across most brands and realized benefits from select price increases, as well as favorable brand mix, led by our Duckhorn Vineyards and Decoy Winery brands. As we noted earlier, we were especially pleased with the expansion of Decoy Limited, which contributed nicely to our gross margin improvement for the quarter. California direct to trade was up 4.6% compared to the prior year period, as we continue to lap the strong on-premise reopening of California and was driven by our Duckhorn Vineyards and Decoy Winery brands. The direct-to-consumer channel was down 35.2% when compared to the prior year period. This decrease was in line with our expectations and due entirely to the aforementioned cadence shift in our Kosta Browne offerings. Without the timing shift, DTC modestly outperformed the prior year period. Tasting rooms were a bright spot, growing nicely on a net sales basis despite unfavorable weather throughout the quarter. Third quarter gross profit was $50.5 million, an increase of $6.5 million, or 14.9% compared to the prior year period. On an adjusted basis, gross profit grew to $51 million, an increase of 6% compared to the prior year period. This represented a 55.8% adjusted gross margin, up approximately 330 basis points year-over-year, improving in all sub-channels and driven by favorable brand mix and the successful execution of planned price increases. Total selling, general and administrative expenses were up $0.9 million or 3.7% compared to the prior year period. The increase in the quarter is primarily due to higher compensation costs, partially offset by favorable operating expenses relative to expectations, due to the timing of certain expenses phasing into the fourth quarter. On an adjusted basis, total operating expenses increased by $0.9 million or 4.4%. Net income was $16.8 million, and diluted EPS was $0.15 per diluted share, compared to net income of $15.6 million and $0.14 per diluted share in the prior year period. Adjusted net income was $19 million, and adjusted EPS was $0.16 per diluted share, compared to $19.2 million and $0.17 per diluted share in the prior year period. Adjusted EBITDA for the quarter increased 9% to $35.8 million. This represented 39.3% of net sales compared to 35.9% of net sales in the prior year period. This 340 basis points increase reflects robust gross profit generation, driven by higher sales volumes, favorable brand mix, the successful execution of planned price increases, and a benefit from the timing shift of certain planned operating expenses into the fourth quarter. At the end of the quarter, we had cash of $36.1 million and total debt of $223.3 million, resulting in our leverage ratio declining to 1.7x net debt. Let's turn now to our outlook for the rest of the fiscal year. Given our performance in the third quarter, we are raising and narrowing our guidance for fiscal year 2023: net sales, adjusted EBITDA and adjusted EPS. Our guidance now calls for net sales of $400 million-$404 million, reflecting approximately 7.5%-8.5% organic volume-led growth. Adjusted EBITDA of $138 million-$140 million, and adjusted EPS of $0.64-$0.66 per diluted share. To reflect our continued margin outperformance, we now expect adjusted gross margin expansion for fiscal 2023 to approach 200 basis points, an improvement versus our prior guide of modest expansion. Keep in mind, our gross margins differ by sub-channel, and we can experience overall gross margin variability depending on sub-channel mix, but with minimal impact to bottom line profitability, as we also manage differing operating expense levels across our sub-channels. It is also important to note, especially considering the softening demand within the broader luxury space, that variability in month-to-month channel performance can influence our performance in any given quarter, including those late in the fiscal year. That said, we remain confident in our ability to finish the year strong and deliver the broad-based growth embedded in our fiscal year guidance. Overall, we are pleased with the third quarter. We remain in an advantageous position within our industry, despite a macro environment that has seen some challenges in broader luxury products, and we look forward to a strong fourth quarter to close out the year. I will now turn it to Sean to go over the details of our recently announced acquisition. Thank you, Lori. As Alex mentioned, we are pleased to be under contract for the acquisition of a production winery in Alexander Valley, Sonoma County. Our strategy with respect to the acquisition of production assets, as we have noted before, is to optimize the balance between in-house production and the use of custom crush partners in a manner that enhances the quality of our wines, increases diversification and optionality, and reflects an efficient use of capital. Production wineries of this scale are rarely available in California, and this acquisition reduces our reliance on third-party custom processing, storage, and bottling facilities, and takes a longer-term view with respect to necessary capacity additions into the future. By optimizing our production processes and affording us greater visibility into our cost of goods in future years, we view this acquisition as an investment in our future growth, our winery brands, and our financial performance. The acquisition is well positioned to support our organic growth plans and could dovetail nicely with the acquisition of a winery brand in the future. The value of entitlements, land, and buildings are difficult to quantify specifically, but we believe that they collectively hold value significantly greater than the acquisition price as we fully utilize the winery. With that in mind, we currently plan to ensure the building alone for more than 1.5x the acquisition value. This winery will be predominantly used to support our Decoy Winery brand, and more broadly, it will provide our winemaking teams with the space, tools, and technology they need to remain at the forefront of luxury winemaking. From an environmental standpoint, the facility is designed to significantly reduce the environmental impact of winemaking on-site and includes a solar panel array capable of producing enough energy to power over 400 homes annually. Processes for the reuse of 100% of water used during the winemaking process and cooling by environmentally friendly refrigerant. Finally, we note that an acquisition of this type and size will provide a natural path for career growth for our employees, and we also expect that new employees will be added at the appropriate time to ensure ideal staffing at all of our production facilities. The transaction is subject to customary closing conditions, and we expect the transaction will close in the next couple of weeks. We plan to transition into the winery quickly, achieving 80% capacity use within the first half of calendar year 2024, while the remaining capacity should be ready for the 2024 harvest. With that, I'll turn it back to Laurie to discuss the financial aspects of the acquisition. Thank you, Sean. As we previously announced, the purchase price was approximately $55 million, and the acquisition will be financed through the company's existing credit facility. After the closing of this acquisition, we expect our leverage ratio to go from 1.7x-2x net debt, with a path to continue deleveraging over time. I am pleased by the acquisition and the benefits we believe it will provide to our future financial results through greater control of our cost of goods, as well as both medium-term gross profit and adjusted EBITDA margin accretion. This accretion will follow some modest near-term pressure on adjusted EPS as a result of incremental interest expense and depreciation. This acquisition is consistent with Duckhorn's commitment to making excellent luxury wines, planning for consistent growth, and efficiently allocating capital. With that, I will pass it back to Alex to wrap up our prepared remarks. Thank you, Lori. I'm very pleased with our strong financial results and consistent outperformance of the luxury wine industry. While the near-term macro environment remains dynamic, I am confident that The Duckhorn Portfolio will continue to benefit from premiumization over the long term, as our recent results demonstrate the resiliency of our customers and brands. Any shifts in consumer behavior and the recent softening demand across the broader luxury space do not have any impact on our long-term growth strategy and the considerable distribution white space opportunity we have ahead of us. Building on the strength of our brands and sales force, we continue to leverage our advantaged position within the luxury wine space to finish this year strong and end our fiscal year 2024 with momentum. We remain committed to delivering sustainable, profitable growth and will always strive to create value over the long term for our shareholders. With that, Lori, Sean, and I are available to take your questions. If you'd like to ask a question, please press star followed by one on your telephone keypad. If for any reason you'd like to remove that question, please press star followed by two. Again, to ask a question, it is star one. Our first question is from Lauren Lieberman with Barclays. Your line is now open. Great, thanks. I've got a couple questions, but first, I just wanted to go back to some of the comments, Alex, that you've made about, you know, some slowdown in on-premise. I mean, it's all, you know, as to be expected, given the consumer environment and obviously comparisons to next year. As you look forward, you know, you mentioned in your closing comments the ongoing opportunities for white space expansion, is it reasonable to think that this continued account development, you know, is enough to still support growth even through a recession? I guess there's a range of how bad a recession could be, but it's early to talk about 2024, but just trying to triangulate, you know, the white space story with kind of slower consumer trends. Thanks. Yeah, Lauren, it's a good question. Yeah, I do still believe in the white space opportunity. We might have to work a little harder out there, as you could imagine, we still think that the brand propositions to new accounts and additional penetration on existing accounts is still within our grasp. The strategy hasn't changed really a whole lot in that regard. You know, and remember, bear in mind, that's just One significant part of our business, the majority of that long-term opportunity, though, is still gonna be kind of the off-premise channel, as it's, as our existing growth has shown. I think in combination, we're gonna still stick with that strategy, and I think the opportunities are ours to go out there and get. Okay, great. Because also in the, your commentary, really, it was really just in the on-premise where you talked about certain seasons slowing. Off-premise, it sounds like, you know, at this point, no real signs of changing consumer trends, and the premiumization, given your comments on Decoy Limited, are still, you know, as strong as ever. We're still seeing good positive growth there. You know it outpaced on-premise a little bit, but we still think that's gonna remain strong. Yeah, Lauren, hi, this is Lori. Thanks for joining us today. You know, when we think about on-premise, our growth is especially impressive. You know, we continue to take share. We have steeper comps than some of our competitors because we weren't out of stock in the past, whereas some of our competitors were. We have some steep comps to look against with regard to off-premise, but we're continuing to take share and grow it just like we said we would. That's where our biggest opportunity is. Remember, we did add some of the sales team, expanded our sales team, and we're seeing great results from that. Yeah, we aren't seeing any slowness in off-premise. Okay, fantastic. Last thing, and I'll pass it on. The acquisition sounds really exciting. It's gonna be fun to see kind of what that, you know, how that evolves. Pretty clear we should be thinking about this as dilutive in 2024. Then I'm guessing it flips to accretive in 2025 once some of that, the benefits from in-house production become more apparent. Is that reasonable? Yeah, well, you know, it might take, you know, about the first 24 months, because remember, our cost of goods, on the majority of our products, take a little bit longer than a 12-month period to start flowing through. Most of this, will flow through our cost of goods as we build. As we start selling those wines through, we will see some of the benefits, but the interest, is more near term. I would just add that if you [crosstalk]. Okay, thank you. Good reminder on the time horizon. I'd just remind, Lauren, this is Sean, that, if you think about, one of the key things that we had to look at in moving forward is, what would, if we did not make this acquisition, the cost of custom crush be as we began to take a larger and larger portion of the market, and we were not in, you know, kind of the range of optimal balance between in-house and custom crush? That would present a situation where our visibility on COGS would be decreased, and potentially, you know, we would not have the control we do over those elements of the production cost. It's both an investment, but also a hedge, and toward visibility. Okay, great. Thank you so much. I've been greedy with questions. I'll pass it on. We ask that you limit yourself to asking one question and one follow-up. Our next question comes from Peter Galbo with BofA. Your line is now open. Hey, guys, I guess I changed shops, and they didn't, they didn't tell me. Thanks for taking the question. Congratulations, Peter. Yeah, apparently. Alex, I hear what you're saying on the, maybe some conservatism around the luxury and consumer, but at the same time, it feels like you had a couple of points that were maybe more positive. You know, tasting signups for through the summer seem like you've mentioned would be pretty strong. Just, can you actually bucket, like, the pluses and minuses of what you're seeing on the ground with the luxury consumer? I just feel like there's a lot of crosscurrents out there, and it would be helpful to kind of unpack some of that. Well, I can't speak to all the luxury consumers as it relate to other businesses, but we're seeing a lot of resiliency in the ability of our customers to continue to support our wines. Our brands continue to show some resiliency. We're capturing them up and down the price, the price grid. We're confident we've made the right investments and the right strategies behind those approaches, that we're very confident that we're gonna continue to capture our consumers the way they wanna be captured in luxury wine into the future. I don't know if that was a little soft for you, but we're continue to remain confident with our plans on how we're communicating with our customers, the products we're offering, the prices we're offering, and the quality results they're receiving. They're continuing to support us. That expands into our trade partners as well. That same philosophy, I think, and trust, translates into our trade partners as well, which is equally as important. Peter, you mentioned visitation, and we did see in Q3, our average spend per visitor was up, which speaks to the premiumization and people willingness to, and resiliency. On the wholesale side, of course, the gains are balanced and sustainable. I think as you noted, Laurie, not only was the number of accounts sold up, but also the average number of labels per account. We're seeing that data and that is showing a resiliency and a diversification of the ways in which we're accessing the consumer. Got it. Okay. No, that's helpful. Then, Lori Beaudoin, I'm running the spreadsheet math, and obviously, we don't have the insight. But, you know, just thinking about the fourth quarter and the implied gross margin, you know, you're shipping a higher margin product in greater quantity with a higher revenue base in the fourth quarter. You know, the implied is that the gross margin stepped down pretty meaningfully sequentially, but just, that wouldn't seem to align with, you know, the Kosta Browne shipments that you're gonna put out in the fourth quarter. So maybe just help us understand that, as we think about, you know, 4Q and then the go forward on GMs. Thanks. Yeah, sure. We're thinking about gross margin in the fourth quarter. Yes, we do have our Appellation Series, which is driving margin. The Appellation Series isn't necessarily the highest margin of the KB offerings. We also have the pricing benefits that we recognized in Q3, but we don't see them pulling through exactly the same in Q4. The product mix will be different, that will impact the overall margin. We anticipate that Q4 margin will materialize really more in line with our year-to-date trends, is kind of a good way to think about it, where we are guiding to about 200 basis points for margin to be improved for the total fiscal year. The other thing I wanna caution you is don't forget, our margin, it varies by channel, and it doesn't necessarily flow straight down to earnings margin, right? Because we have different operating expense per channel. Thinking about gross profit margin isn't necessarily maybe the best way to think about our business, more in terms of earning margin. Got it. Thanks, [Bet]. Our next question is from Andrea Teixeira with JP Morgan. Your line is now open. Hi, everybody. Good afternoon, and congrats, Lori. Thank you for being such a great leader and teaching us, along with Alex. Welcome, Jennifer. Can you, I guess, I mean, two things. One, the real question, then I'll follow up. If you can comment on the wholesale, I think we've seen you gain wholesale inventory, sorry, against what you're gaining in terms of distribution, and how is the productivity per shelf, in particular for the Core Decoy? I understand, of course, Decoy Limited has been extremely successful, but just understanding how the price points landed for Decoy and how receptive it has been. And when would you believe that you're going to land in terms of again, getting all the distribution lapped at some point, how we should be thinking going forward, if we should be thinking of acceleration in some of these channels outside California, and with the gains that you had in Publix, in some of Kroger and all of that. Then related to the question just now on margins, and I think we've seen, I understand the channel, but KB obviously in direct to consumer is a higher margin. So I'm thinking it really doesn't, it doesn't really relate. I don't know if there is any discrete item that you wanna point out, in terms of getting a margin to around 53-ish% in the fourth quarter. If you are thinking more that given your SG&A, because DTC carries a higher SG&A, if we should be thinking that difference would be that SG&A gets really heavy in the fourth quarter. Because if you look at the EBITDA guidance, even if after you changed it implies a really, a much lower margin, an EBITDA margin for the quarter. Thank you. Okay, I think the answer is true. How are you? How are you doing, [uncertain]? Okay, doing great. Still trying, still making some notes on your questions. We got a lot in there. Let me just start out by saying, if I remember correctly, back to your original areas, we're really happy with our days on hand. We don't think we're seeing any destocking issues as it relates to our products and our business. I'm not gonna comment about competitors. Our wholesale sales have been very balanced and sustainable, and we've gained on accounts sold and average sales per account. Again, we've continued to hit on strategy. You know, we've made some investments in our sales force. I'm glad we did, and it's continues to pay off directly as planned, and again, I think supports that outcompeting of the competitors. We talked a little bit about some of the luxury it had, a couple of tough comps on prior year's growth. I think our results would speak to prior year growth, plus the swapping of the Kosta Browne, we still kind of hit it out of the park, so I'm quite pleased with the trajectory we set ourselves up on. You know, we could probably take a, you know, the macro environment on some one-on-one calls and talk about what we all think is gonna happen there. I still believe that with our brand strength and our go-to-market strategy, that we're gonna continue to take share, even around the macro environment pressures that we're all aware of. Maybe that'll give you a little bit of context. Lori, you might be able to address some of our margin questions. Sure, yeah. Andrea, you mentioned, thinking about, a little bit about the SG&A. In Q3, our adjusted EBITDA on our margin did enjoy some upside from SG&A favorability, which really is a function of timing. We're gonna see that flow into Q4. Roughly, to give you a little more context, a little more than half of the about $7 million in Q3 adjusted EBITDA beat versus consensus, is due to a timing shift. That's, like I said, SG&A shifting from Q3 into Q4. If you'd like a little more context on that, really, it's G&A around outside services and some timing of selling expenses. Yeah. No, I do recall, Lori, and thank you for reminding all of us that there was that time shift. I think to Peter's question, I think was also the gross margins still struggling, because I do believe from what, at least what I remember, that DTC in particular, even though the Appellation maybe is not as Depletion Series is not as profitable on a GM level, but still is profitable, right? I mean, if I understand, like, KB carries a higher gross margin. I'm puzzled to realize that, you know, your gross margin on a sequential basis would be lower. Is that just being conservative? I do know you have a lot of visibility by now, what you're gonna sell. I just wanna find out, or is it just Promus that you're helping, or on the other part of the portfolio? No. Yeah, you're correct. The Appellation Series is our largest series of the KB offering, and it does have a nice, healthy margin. When we look at flow through of our other brands and our other products and our demand plan expectation, there's a bit of offset of some of that upside, just part of our normal winery brand margins that will offset. As we look at how we think it'll flow through, that's really how we think we'll land in terms of about around that 53% to a little bit higher for the full year rolled up. Okay. Then Alex, just a fine point on your comment on the depletions and shipments. I think your prepared remarks is that a little shorter on depletions, but I think, I mean, a little shorter is a little shorter, so nothing to call home about, right? I'm understanding that this is like normal cost of business. There's no major thing to call out in terms of like puts and takes. Is there any regional. Because to be actually, it's a good news that I think California, which is your stronghold, it still was strong, it seems, or how we should be thinking about distribution on a regional basis? Yeah, your point is a good one. There is, you know, there's always gonna be a little bit of variability in that, but your comment is correct. There's nothing, there's nothing to call out, and there's no concern with having depletions in this, in this cycle, just a tad behind shipments. Again, as I balance that and what I know about the market, with our days on hand, with our distributors, we're in a really solid position, and no call outs there. Thank you, everybody. [Pass it on]. Our next question is from Kevin Grundy with Jefferies. Your line is now open. Great. Thanks. Good afternoon, everyone. Hey there. A question for Alex, probably. More sort of theoretical, just on the slowdown that we're seeing in the wine category, and not exclusively at the value end. Alex, I'm just kind of curious to get your thoughts as you sort of unpack this, 'cause, you know, we're seeing the slowdown in the category. It's concerning. There's concerns about the distributor retail inventory levels, and the rate of premiumization has slowed. It hasn't been arrested, this has been in place for a long time, but it certainly slowed as well, certainly when we look at the amount of market share that's being gained at the premium level. As you guys sort of unpack this, as you're looking at the consumer data that you have available to you, how much are you sort of crediting to cyclical factors? How much are you crediting to secular factors here that are driving some of this weakness? Then I think to kind of tie in a little bit on an earlier question, how concerning is that to deliver against your longer term high single digit guidance? I ask that in the context, it seems like you have very good visibility on the distribution, at least over the next two to three years. It would become more of a risk of velocity, and then the factors in forming that seemingly are both cyclical, at least near term, and then secular, obviously longer term. Sorry for a very verbose question, but I would love to get your thoughts on that. Thank you. Hey, Kevin, how you doing? Yeah, they're good questions. I think that on a secular basis, cyclical basis, right? Maybe not annually cyclical, but longer secular basis, things ebb and flow a little bit. We've had 30 years of a wonderful series of tailwinds, of premiumization. I think there are gonna be some have and have-nots in the industry, and we intend to definitely be square in the middle of the haves. There's a lot of producers out there, and scale is rewarding. Scale and luxury, of which we occupy a very unique position in, is being rewarded right now, and I think that's gonna continue. Again, I've said this before, and I believe this strongly, fine wine and fine wine is not some new category. It's been around since the Romans, so I believe we will continue to excel within it. It's gonna have a couple ups and downs a little bit, and I don't think, I don't know if everyone's going to rise to the top, but we will certainly be there. The category is not going away. We're starting to see, you know, we're starting to see some younger consumers continue to increase their purchase levels. I think that's the beginning of a new cycle of a new group of consumers. I guess net-net, we are not changing our long-term algorithm. We're not changing how we're looking at the business, and we're gonna continue to invest and support taking share at the luxury level. You know, new account opportunities are gonna remain at the forefront of what we look at. We are poised to get them and strategically going after them and are working at it, right? There's a lot of accounts out there we're not in, that we can go out and get over the next several years, and we intend to do that. I guess if you're looking for some pessimism from me, you're not gonna get any. That's great. That's refreshing, Alex. I appreciate the thoughts. Just not that I'm not that I'm asking you to guide for next fiscal year, but you guys have already provided guidance in the, or at least you provided a very helpful slide in the past. Sean, this, you and I have chatted on this in the past as well. It would seem that provided that velocity holds on a per customer basis, you have very good visibility that would imply at least high single digit growth in line with your guidance, just on distribution alone. Is that a fair assessment? Yes. Yeah, it does. That would be a fair assessment. That's right. You're referring to materials that we had out last September. Yeah That did assume, flat velocities over the long term to it, analyzing the new account penetration. That's, that would be correct, and I think supports [crosstalk] the positivity to which Alex spoke. Okay. That's really helpful, guys. Thank you very much. Lori, of course, all the best. Thank you very much. Thanks, Kevin. Our next question is from Gerald Pascarelli with Wedbush Securities. Your line is now open. Great, thanks very much. I just have one question on pricing, I guess, related to wholesale. I know measured channels are only, I think it's a 30-year business, and understanding that you've been taking rate, your relative price gaps in measured channels have narrowed, fairly consistently to the category. As we think about the longer term margin opportunity, how do you think about managing your relative price gaps in terms of your decision to take incremental rate in any given year? Just any color you could provide there would be helpful. Thank you. Yeah. I think you've heard us talk before, Gerald, about how we take a very methodical view on price and how we're very guarded and cautious, and we use a long-term approach to introducing price change. Our number one mantra, if you will, is growth by accounts and by units, right? We don't plan to grow substantially off of taking price. Our growth plan is increasing selling our cases of wine and keeping those moving. We will take price to the extent that we can, but we don't wanna interrupt our growth plan as well. Got it. Thank you very much. Appreciate it. Our next question is from Rob Ottenstein with Evercore. Your line is now open. Great. Thank you very much. I wanna just talk much more longer term and, and kind of take off from one of the prior questions, and that is on the recruitment of younger drinkers to the wine category. You mentioned some progress there. I'd love to hear more about that. But, you know, are you at all worried about, you know, sort of those bigger trends in terms of younger consumers? Do you feel that Duckhorn, as, and the, in many ways, really the industry leader, in wine, certainly higher end wine, you know, has a role to play here, or responsibility to bring in and recruit younger drinkers over time? Are you toying at all with social media, different packaging that may appeal to younger drinkers? Just love to get your thoughts, and again, on terms of longer term strategy, as you build the business. I know this is probably nothing you're too concerned about today and, you know, in the near term, but just kind of bigger picture. Hey, Robert, good question. You know, we get this a lot. We're concerned with everything, right? Our job is to be concerned with everything, and long-term growth in consumers of our wines is top of mind. I was referring to a survey with the 21 survey we saw, that would indicate that younger consumers are starting to catch up in the value of wine they're buying, which is a good sign, right? We've all kind of seen some of the ink out there, talks about older consumers are the ones buying the expensive stuff. What we're seeing is, I'm not sure if cyclical-secular, but more cyclical. I think it speaks to the premiumization desires of all consumers. People wanna try something that's a little better when they can. We believe that feeling of moving up the chain, if you enjoy wine, you try a $5 bottle of wine, then you try an $8, then you try a $10. I think that feeling still exists and will continue to exist. I don't think that's gonna be easy. We have to continue to invest. Yes, you're right, we're in social media, we're in traditional print media, we're in experiential type of marketing activities at the winery and throughout the markets we support. To continue to obviously work with every possible retailer and restaurateur we can, to continue to get the Duckhorn message out there. It is a long-term, multipronged approach to make sure we're taking care of our current, medium and older customers, and to the extent we can, making sure that we are communicating with the younger consumers of luxury wine, how and where they want to be consumed, communicated with. You made a couple comments. I don't think we're gonna go out and start doing weird things in packaging and stuff. I think there's some norms. We'll see. If the market wants it, we will, but we believe that the traditional packaging and the traditional route to market is with, you know, with certain adjustments along the way, is still how people wanna receive their luxury wine products. We are extremely invested in making sure we understand where the younger, new, younger consumers are. What are they tasting? What are they drinking? What do they want in luxury? We're focused on making sure that whatever it is, we're addressing it and providing it to them. Yes, we're concerned with it. We're working with it. We're not making any massive contingency plans. I do not believe, again, like I mentioned to Kevin, we do believe in luxury wine over the long term. I don't believe that the category is ever gonna disappear, we just wanna be the leader of it, of scaled luxury. That's we're executing on it. We're gonna continue to do that, and then we will address whatever the younger consumers need to make sure they get their luxury wine however they need it. Great. Thank you very much. There are no more questions, so I'll pass the call back over to Alex. All right. Well, thank you. I wanna thank you again for joining us today to review our third quarter performance and our raised outlook for the remainder of the fiscal year. I look forward to speaking to you again in late September, when we report our fourth quarter and fiscal year 2023 results. Everyone take care and look forward to talking to you again. Bye-bye. That concludes the conference call. Thank you for your participation. You may now disconnect your lines.