Lark Distilling Sales Momentum Builds as Restaged Portfolio Gains Traction

Lark Distilling (ASX: LRK) increased net sales 15.1% to $18.0 million in FY26, with growth across every core channel following the launch of its restaged Signature Whisky Range.

International sales provided the strongest momentum, with export net sales up 69% and Global Travel Retail (GTR) net sales rising 43%, while domestic net sales increased 7.2%.

The Tasmanian whisky producer remained in investment mode, recording an operating EBITDA loss of $4.5m compared with a $4.2m loss a year earlier as it continued spending on sales, marketing, and international expansion.

Lark ended FY26 with $14.3m in cash and no debt, while its 2.4 million-litre Whisky Bank and completed Pontville Distillery redevelopment provide capacity to support further sales growth.

International Momentum

Export net sales increased 69% as Lark expanded into 10 Asian markets, completed its first shipment to China, and rolled the Signature Whisky Range into overseas distribution.

GTR net sales reached $2.2m after a new channel-exclusive portfolio was ranged across key Australian airport partners, a permanent Sydney Airport fixture was upgraded, and an Asia-Pacific distribution partnership delivered an initial shipment to Changi Airport.

Combined international channel sales reached $4.1m, up 53.7% from the prior year, with Lark identifying China and other Southeast Asian markets as key areas for distributor expansion during FY27.

The domestic business contributed $13.9m, including direct-to-consumer net sales of $7.5m and business-to-business net sales of $4.9m, while eCommerce sales increased 21.5% to $3.4m.

Hospitality net sales edged 1.9% higher to $4.1m despite a temporary Cellar Door closure, while the relaunched GOTHAM at The Still recorded 15% revenue growth and a 26% increase in visitation.

Balance Sheet Reset

Normalised gross profit increased by $0.8m to $10.9m, although normalised gross margin declined 4.3 percentage points to 60.5% as the product mix changed and sales shifted toward lower-margin export and GTR channels.

Lark recognised $36.2m of non-cash adjustments comprising a $20.7m goodwill impairment and a $15.5m write-down of acquired maturing whisky inventory, largely associated with historical acquisition values attached to the Shene whisky bank acquired with Pontville.

The writedown reduced total inventory to $49.4m and brought carrying values of acquired whisky closer to Lark-produced stock.

The goodwill impairment reflected recent trading performance without affecting liquidity or operating capability.

Net operating cash outflow was $5.8m, although Lark attributed part of the year-on-year increase to a temporary $3.8m working capital movement that had largely reversed after year-end.

Expanded Distribution

Lark plans to increase both distribution points and the rate of sales through each outlet, supported by product innovation, targeted marketing, and broader rollout of its Signature Whisky Range.

Domestic priorities include additional distribution through Spirits Platform, while GTR expansion will remain focused on Asia-Pacific and international growth will centre on China alongside emerging European interest.

The completed Pontville Distillery redevelopment means Lark does not expect further material capital expenditure to execute its current growth strategy, while its Whisky Bank provides inventory to support increased commercialisation.

“We can confidently say that we now have the best whiskies and packaging in the New World, and it is now up to us to take our whisky from Hobart to the global stage,” chief executive officer Stuart Gregor said.

“With a clean balance sheet and a strong cash position, we are well placed to build on this momentum and I am confident FY27 will be a year to celebrate.”