12:11 PM EST, 03/06/2024 (MT Newswires) -- Duckhorn Portfolio ( NAPA ) has outpaced the wine category but the company is not immune to pressures the category is facing due to the broader consumer environment, RBC Capital Markets said in a note Wednesday.

The investment firm expects Duckhorn fiscal Q2 earnings to come below consensus due to weaker than anticipated wholesale shipments that worsened in January.

Additional factors impacting demand for liquor products include "continued destocking from retailers, weakness in on-premise and a pressured environment for independent liquor stores," according to the note.

The company is expected to face challenges in California wholesale business due to high precipitation and in the direct-to-consumer channel because of moderate tasting room traffic, RBC added.

The firm said it is excluding the higher end of Duckhorn's fiscal year guidance as the company risks reporting two consecutive difficult quarters.

RBC reiterated its outperform rating and kept the price target at $17.

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