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Scheid Family Wines Announces Third Quarter Fiscal 2025 Results

The recent announcement from Scheid Vineyards Inc., operating as Scheid Family Wines, highlights their financial performance for the nine months concluding on November 30, 2024. The report indicates a substantial drop in revenues, underscoring the challenges faced within the wine industry.

Financial Overview

The company's total revenues saw a sharp decline of 17%, totaling $43.3 million for the first nine months of fiscal 2025, down from $52.4 million the previous year. Notably, sales of cased goods diminished by 6%, registering $32.2 million compared to $35.2 million in the same timeframe last year. Significant reductions were also observed in both bulk wine sales, which fell by 22% to $2.1 million, and grape sales, decreasing by 23% to $1.0 million.

The winery processing and storage revenues plummeted by 50%, dropping from $10.4 million to $5.2 million due to the conclusion of a processing contract and an unexpectedly light 2024 harvest season. This downturn in revenues led to a gross profit decline, with gross margins decreasing from 30% to 26% – a direct consequence of lower bulk wine prices in an oversaturated market.

Expense Management

Despite the revenue slump, Scheid Family Wines managed to reduce sales and marketing expenses by 18%, bringing them down to $6.8 million, from $8.3 million last year. Similarly, general and administrative expenses also saw a decline, decreasing by 6% to $5.0 million from $5.3 million.

In the first quarter of fiscal 2025, the company recognized $3.6 million in revenue from the early termination of a winery processing contract and a subsequent gain from land sales totaling $1.7 million in the second quarter.

However, the company felt the pinch of increased interest expenses which skyrocketed by 146% to $11.8 million, up from $4.8 million, largely due to a rise in interest rates affecting their lenders at a default average rate of 14.2%.

Notably, earnings before interest, taxes, depreciation, and amortization (EBITDA) rose to $8.5 million from $6.2 million, reflecting the impact of the aforementioned revenue from processing agreement termination and land sales.

Net Loss and Harvest Update

Ultimately, Scheid Family Wines concluded the nine months with a net loss of $6.8 million, marking a stark contrast to the $1.8 million loss recorded in the same period the previous year. The company's grape harvest for 2024, which ended on October 30, yielded results approximately 15% lower than the five-year average, aligning with trends in other coastal vineyard regions of California.

About Scheid Family Wines

For over 50 years, Scheid Family Wines has positioned itself as a major player in the U.S. wine market, ranking among the top 25 wine producers. Headquartered in Monterey County, California, the company prides itself on its sustainable and organic practices across a diverse range of vineyards in the Central Coast region. With a focus on renewable energy, their luxury winery is powered entirely by wind energy from a massive wind turbine, contributing to local energy supply.

Scheid offers a wide range of globally distributed brands, including Scheid Vineyards, Sunny with a Chance of Flowers, VDR (Very Dark Red), and many more, catering to a market spanning over 30 countries.

For further details, visit Scheid Family Wines and OTC Markets - SVIN.