Vintage Wine Estates of Sonoma County revenue rises 33% in Q2, helped by acquisitions and pandemic rebound
Vintage Wine Estates Inc. (Nasdaq: VWE), among the largest wine companies in the U.S., on Monday reported fiscal second-quarter earnings dipped 7.8% from a year ago, but adjusted earnings jumped 137% in that period.
Quarterly net revenue for The Santa Rosa-headquartered group of California and Pacific Northwest wine, spirits and cider brands such as Kunde, B.R. Cohn and Ace was $83.6 million, up by nearly one-third from almost $63 million a year before.
CEO Pat Roney said in the announcement that the impact of inflation likely will result in bottle price increases.
"We are operating in a tight labor market as well as facing challenges with the timing of deliveries of dry goods,“ Roney said. ”We are working with our suppliers to prioritize our needs and carefully managing our customers' requirements. It takes an agile and resilient team to succeed in this environment. Inflation is impacting the industry and, while we will not be a leader in price changes, we are seeing the trend and we intend to systematically implement price increases as early as March to address the inflationary impact on input costs.“
The acquisitions of the Sebastopol-based maker of Ace Cider and Napa-based direct-to-consumer wine company Vinesse, both completed in the quarter, made up one-third of the revenue gain, the company said. The most recent acquisition was of Meier’s Beverage Group in January.
Vintage noted it has a sizable war chest for more such deals. At quarter end, it had about $274.2 million in liquidity, including $75.1 million in unrestricted cash and the roughly split between revolving credit and accordion financing.
Volume of case shipped grew over the year by 63.2%, to the equivalent 878,000 9-liter case. That growth came from wholesale, up 93% to 506,000 cases, boosted by the Ace Cider acquisition; business to business such as exclusive labels, up 50% to 212,000 cases; and direct-to-consumer sales at tasting rooms and clubs, up 18% to 160,000 cases.
“Tasting room traffic exceeded pre-pandemic levels, wine club membership continues to expand, customer retention remains strong and our ecommerce subscriber count keeps increasing,” Roney said.
Sales momentum Vintage called “very strong” has led it to increase its guidance for revenue in fiscal 2022 up to $275 million–$285 million and for adjusted earnings to $63 million–$66 million."
Vintage reported net income of $8.55 million, or 14 cents per diluted share, for the quarter ended Dec. 31, down from $9.28 million a year before, or 27 cents a share.
Adjusted earnings were $10 million, or 17 cents a diluted share, compared with $4.6 million, or 19 cents a share.
Vintage Wine Estates is the 15th largest U.S. wine company, producing over 2 million cases annually.