US wine group The Duckhorn Portfolio has cut its forecast for annual sales, pointing to weak growth in the country’s market for “luxury” wine.

Interim president, CEO and chair Deirdre Mahlan said Duckhorn “continues to outpace both total wine and luxury wine markets”. She added consumers “routinely choose our products over the competition”.

However, she told analysts: “The industry growth rate for luxury wine over the past 12 weeks has been flat to 1%, which we expect to continue, and that is what we assume in our updated guidance for fiscal 2024.”

The company expects its annual net sales to be between $395m and $411m, down from its December forecast of between $420m and $427m. In the group’s previous financial year, it generated net sales of $403m.

Duckhorn also trimmed its forecast for its annual adjusted EBITDA. It expects that metric to hit between $145m and $150m for the year, versus its previous guidance of $150m and $153m. In the company’s last full fiscal year, it generated an adjusted EBITDA of $144.5m.

“We are updating our full-year fiscal 2024 guidance to reflect our second-quarter results and more caution with regard to the second half. Our new guidance implies a second-half growth rate of low-to-mid single-digit net sales growth,” Duckhorn CFO Jennifer Fall Jung said.

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The Napa Valley-headquartered vintner produces “luxury” wine brands such as Duckhorn Vineyards, Decoy and Goldeneye.

On a call with analysts to discuss Duckhorn’s second-quarter results and fresh forecasts, Mahlan said the company sees evidence of a “cautious view” of market growth from distributors and retailers, who are “assertively managing inventory”. These “inventory adjustments did impact our top-line results”, she added.

In the three months ended 31 January, the group posted a net sales decline of 0.4% to $103m. Its adjusted EBITDA was $42.7m, an increase of 10.1%. Income from operations stood at $24.9m, against $11.6m a year earlier. Second-quarter net income was $17.8m, versus $5.4m in the corresponding period the year previous.

Duckhorn expects to achieve growth in the second half of the year through innovation and “by-the-glass programmes” with its distributors.

The group plans product releases such as a lower calorie, lower alcohol Sauvignon Blanc and an Appalachian-specific Paso Robles Cabernet Sauvignon under the Decoy Limited brand. It will look to improve the availability of its core wines including Duckhorn Chardonnay and Decoy Limited Merlot.

“These initiatives are expected to add additional upside to growth in the second half, contributing to our revised full-year outlook for net sales between $395m and $411m,” Mahlan said.

Last year, Duckhorn Portfolio purchased North Coast Winery and Vineyards in California, a fully operational winery plus equipment, alongside over seven acres of Cabinet Sauvignon vineyards, in a deal worth approximately $55m.