Willamette Valley Vineyards Posts Results for Q1 2025

Rhea-AI Summary

Willamette Valley Vineyards (NASDAQ:WVVI), a leading Oregon Pinot Noir producer, reported challenging Q1 2025 results. The company's net loss widened to $728,981 from $521,805 in Q1 2024, a 39.7% increase. Sales revenue declined 14.3% to $7.54 million, primarily due to a $1.29 million decrease in distributor sales. Loss per share after preferred dividends increased to $0.26 from $0.22 year-over-year.

The company's gross profit fell 9.7% to $4.76 million, while operating expenses decreased 4.2% to $5.63 million due to lower selling and administrative costs. To address distribution challenges, WVVI appointed Mike Osborn, founder of Wine.com, as the new CEO.

Positive

• Operating expenses decreased by 4.2% to $5.63 million due to lower legal costs
• Direct-to-consumer sales increased by $24,318
• Appointment of experienced Wine.com founder Mike Osborn as new CEO to address distribution challenges

Negative

• Net loss increased by 39.7% to $728,981
• Sales revenue declined 14.3% to $7.54 million
• Distributor sales decreased by $1.29 million
• Gross profit fell 9.7% to $4.76 million
• Loss per share after preferred dividends worsened to $0.26 from $0.22

Insights

Financial Analyst

WVVI's Q1 shows worsening performance with increased losses and revenue decline amid distribution challenges, though management changes signal strategic pivot.

Willamette Valley Vineyards' Q1 2025 results reveal concerning trends in their business fundamentals. Revenue declined 14.3% to $7.54 million compared to $8.80 million in Q1 2024, primarily driven by a $1.29 million decrease in distributor sales. This distributor channel weakness represents a significant challenge for the company's wholesale business model.

The bottom line deteriorated with net losses increasing by 39.7% to $729,000, compared to $522,000 in the prior year period. Loss per common share after preferred dividends increased to $0.26 from $0.22. This expanded loss occurred despite a 4.2% reduction in selling, general and administrative expenses, indicating that cost-cutting measures haven't been sufficient to offset the revenue decline.

The company's gross profit margin actually improved to 63.1% from 59.9% year-over-year, likely reflecting a more favorable sales mix with higher contribution from direct-to-consumer sales, which typically carry better margins than distribution sales. However, this margin improvement wasn't enough to prevent the increased losses.

Interest expenses rose by 29.8% to $298,221, suggesting increased debt burden or higher interest rates on existing debt, further pressuring profitability. Management's appointment of Mike Osborn, founder of Wine.com, as CEO signals recognition of the distribution challenges and potentially indicates a strategic shift toward strengthening direct-to-consumer channels, leveraging Osborn's e-commerce expertise in the wine industry.

SALEM, Ore., May 13, 2025 /PRNewswire/ -- Willamette Valley Vineyards, Inc. (NASDAQ:WVVI) (the "Company"), a leading Oregon producer of Pinot Noir, generated a loss per common share after preferred dividends of $0.26 and  $0.22 for the three months ended March 31, 2025 and 2024 respectively, an increase of $0.04, for the three month period ended March 31, 2025 over the same three month period in the prior year. 

Sales revenue for the three months ended March 31, 2025 and 2024 was $7,541,583 and $8,803,080, respectively, a decrease of $1,261,497, or 14.3%, in the current year period over the prior year period. This decrease was caused by a decrease in revenues from distributor sales of $1,285,815, partly offset by an increase in direct sales to consumers of $24,318 in the current year's three-month period over the same period in the prior year.  

Gross profit for the three months ended March 31, 2025 and 2024 was $4,759,108 and $5,272,722, respectively, a decrease of $513,614, or 9.7%, in the first quarter of 2025 over the same quarter in the prior year. This decrease was primarily the result of a decrease in sales through distributors.

Selling, general and administrative expenses for the three months ended March 31, 2025 and 2024 was $5,629,086 and $5,875,299, respectively, a decrease of $246,213, or 4.2%, in the current quarter over the same quarter in the prior year. This decrease was primarily the result of a decrease in selling expenses of $60,072, or 1.5% and a decrease in general and administrative expenses of $186,141, or 10.1% in the current quarter compared to the same quarter last year. General and administrative expenses decreased in the first quarter of 2025 compared to the same quarter of 2024 primarily as a result of lower legal costs.

Net loss for the three months ended March 31, 2025 and 2024 was $728,981 and $521,805, respectively, an increase of $207,176, or 39.7%, in the first quarter of 2025 over the same quarter in the prior year. The increase in net loss for the first quarter of 2025, compared to the comparable period in 2024, was primarily the result of lower case sales to distributors in 2025.

Jim Bernau, Founder and President of the Company said "This first quarter reflects the current challenges in national distribution through our wholesalers.  In order to help address these challenges, we have hired Mike Osborn as our new Chief Executive Officer. Mike, who was the founder of Wine.com, will bring to the Company extensive experience in the wine industry."

For a complete discussion of the Company's financial condition and operating results for the first quarter 2025, see our Form 10-Q for the three months ended March 31, 2025, as filed with the United States Securities and Exchange Commission on EDGAR. 

Willamette Valley Vineyards, Inc. is headquartered at its Estate Vineyard near Salem, Oregon.  The Company's common stock is traded on NASDAQ (WVVI).

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, referred to as the "Securities Act", and Section 21E of the Securities Exchange Act of 1934, as amended, referred to as the "Exchange Act". These forward-looking statements involve risks and uncertainties that are based on current expectations, estimates and projections about the Company's business, and beliefs and assumptions made by management. Words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates", "predicts," "potential," "should," or "will" or the negative thereof and variations of such words and similar expressions are intended to identify such forward-looking statements. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements due to numerous factors, including, but not limited to: availability of financing for growth, availability of adequate supply of high quality grapes, successful performance of internal operations, impact of competition, changes in wine broker or distributor relations or performance, impact of possible adverse weather conditions, impact of reduction in grape quality or supply due to disease or smoke from forest fires, changes in consumer spending, the reduction in consumer demand for premium wines, and the revenues or costs for any of our tasting rooms and restaurants exceeding our expectations. In addition, such statements could be affected by general industry and market conditions and growth rates, and general domestic economic conditions.

Many of these risks as well as other risks that may have a material adverse impact on our operations and business, are identified in Item 1A "Risk Factors" in our Annual Report on Form 10-K. 

The following is the Company's Statement of Operations for the three months ended March, 31, 2025 compared to the three months ended March 31, 2024:

					Three months ended
					March 31,
					2025		2024
SALES, NET					$       7,541,583		$       8,803,080
COST OF SALES					2,782,475		3,530,358
GROSS PROFIT					4,759,108		5,272,722
OPERATING EXPENSES:
	Sales and marketing				3,967,710		4,027,782
	General and administrative				1,661,376		1,847,517
		Total operating expenses			5,629,086		5,875,299
LOSS FROM OPERATIONS					(869,978)		(602,577)
OTHER INCOME (EXPENSE)
	Interest expense, net				(298,221)		(229,678)
	Other income, net				142,476		98,043
LOSS BEFORE INCOME TAXES					(1,025,723)		(734,212)
INCOME TAX BENEFIT					296,742		212,407
NET LOSS					(728,981)		(521,805)
Accrued preferred stock dividends					(563,177)		(563,177)
LOSS APPLICABLE TO COMMON SHAREHOLDERS					$    (1,292,158)		$    (1,084,982)
Loss per common share after preferred dividends,
	basic and diluted				$                 (0.26)		$                 (0.22)
Weighted-average number of
	common shares outstanding, basic and diluted				4,964,529		4,964,529

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SOURCE Willamette Valley Vineyards

FAQ

What were WVVI's Q1 2025 earnings results?

WVVI reported a net loss of $728,981 in Q1 2025, with revenue declining 14.3% to $7.54 million and a loss per share of $0.26 after preferred dividends.

Who is the new CEO of Willamette Valley Vineyards?

Mike Osborn, the founder of Wine.com, was appointed as the new CEO to help address the company's distribution challenges.

Why did WVVI's revenue decline in Q1 2025?

The revenue decline was primarily due to a $1.29 million decrease in distributor sales, partially offset by a small increase in direct-to-consumer sales.

How much did WVVI's operating expenses change in Q1 2025?

Operating expenses decreased by 4.2% to $5.63 million, mainly due to lower selling expenses and reduced legal costs.

What was WVVI's gross profit for Q1 2025?

WVVI's gross profit was $4.76 million in Q1 2025, representing a 9.7% decrease from the same period in 2024.