Lark Distilling Boosts Sales 31% as Pontville Upgrade Advances
Lark Distilling Co. reported a robust Q3FY25 with net sales rising 31% to $4.3 million, driven by growth in travel retail, ecommerce, and exclusive whisky releases. The company also progressed its Pontville distillery redevelopment and maintained positive operating cash flow.
- Net sales up 31% to $4.3 million in Q3FY25
- Strong growth in Global Travel Retail and D2C ecommerce channels
- Exclusive LARK Rare Seppeltsfield Tawny Cask fully sold out via Whisky Club
- Pontville distillery redevelopment on track with major capacity upgrades
- Positive operating cash flow and $24.2 million cash reserves
Sales Momentum and Channel Performance
Lark Distilling Co. Ltd (ASX: LRK) delivered a strong third quarter for fiscal 2025, with net sales revenue climbing 31% year-on-year to $4.3 million. This growth was primarily fueled by robust performances in the Global Travel Retail (GTR) segment, direct-to-consumer (D2C) ecommerce, and exclusive releases through The Whisky Club. The company’s GTR sales notably increased by 41% compared to the prior corresponding period, supported by activations at Sydney and Melbourne International Airports.
The D2C channel also saw steady gains, bolstered by the Wilderness Single Cask Program, while The Whisky Club’s launch of the LARK Rare Seppeltsfield Tawny Cask was a standout success, selling out completely and marking the first in a planned series of exclusive releases. These premium offerings underscore Lark’s strategy to deepen consumer engagement and elevate brand prestige.
Product Innovation and Market Expansion
Q3 also marked the initial sell-in of KURIO, a new Tasmanian blended malt whisky aimed at broadening Lark’s consumer base and consumption occasions. Early trade interest and listings through Endeavour Drinks and independent retailers suggest promising uptake as consumer sales are expected to ramp up from May.
While direct export sales dipped slightly in Q3, reflecting the timing of initial shipments to Southeast Asian markets, Lark completed its distribution network in the region with a new agreement in Cambodia. This expansion complements ongoing activation plans with Asian distributors, positioning the company for sustained international growth.
Operational Efficiency and Capital Management
The company’s transition to a distributor-based sales model domestically, including its partnership with Spirits Platform, has delivered operating cost savings despite a slight decline in domestic B2B net sales. Trade depletions through Spirits Platform were strong, with over 300 new outlet listings year-on-year, signaling growing market penetration.
Capital expenditure focused heavily on the Pontville distillery redevelopment, which is progressing on schedule. This comprehensive upgrade will consolidate distilling, blending, coopering, and tourism operations on a single site, enhancing capacity and operational efficiency while preserving Lark’s signature style. With most investment now complete, commissioning is expected in Q4FY25.
Financial Position and Outlook
Cash flow from operating activities was positive at $0.3 million for the quarter, a marked improvement from prior periods. The company’s cash and term deposits stood at $24.2 million at quarter-end, supported by $4 million proceeds from the sale of the Bothwell Distillery. A $5 million committed bank facility remains undrawn, providing additional liquidity.
Lark’s CEO, Sash Sharma, highlighted the quarter’s achievements, emphasizing the successful launch of exclusive whisky releases and the steady progress of the Pontville redevelopment. The brand restage initiative is nearing completion, expected to bolster Lark’s positioning as Australia’s leading luxury single malt whisky and support its global expansion ambitions.
Bottom Line?
With strong sales momentum and strategic investments underway, Lark is poised to deepen its luxury whisky leadership amid evolving market dynamics.
Questions in the middle?
- How will the new KURIO blended malt whisky perform in consumer markets post-launch?
- What impact will the Pontville distillery upgrades have on production capacity and margins?
- How effective will the brand restage be in accelerating Lark’s international growth?
