Scheid Vineyards ($SVIN) Releases Quarterly Earnings

Nate did a post last month, "Interpreting the Scheid Vineyard 2019 Results". The trends that he noted in that post, and also in our post last summer about developing concerns with Scheid, have not really changed.

Gross profit was flat year over year, but SG&A is $4.2 million quarterly and gross profit is only $2 million. And that does not include interest expense, which at $1.2 million is now almost 60% of gross profit. There was a comment on our last Scheid post that is worth including here:
Nice post. COVID will certainly put a damper on their cased goods growth this year. Their new low calorie/health conscious line of Sunny with a Chance of Flowers seems like the right move, though.

One thing I would add is that they're currently in the process of monetizing a few parcels of unencumbered land. This has been in the works for some time, but looks like it was gaining significant ground before COVID hit. Check out the Greenfield town meetings documents on "Las Vinas" and "Pinnacles Plaza". Unfortunately, it looks like they will need to monetize these properties relatively soon. If they can sustain their case growth for two more years (e.g., sell over 600,000 cases), I think they will be fine. Though it truly is a binary, option-like play. 
Shares are now offered for $18.75, which is a seven-year low. We will have an update with our thoughts and analysis in the upcoming August Issue (#31) of the Oddball Stocks Newsletter.

Earnings 1st Qtr Fiscal 2021 by Nate Tobik on Scribd

1 comment:

  1. I just stumbled across your site but a long-time Schied investor. There are only a few public wine companies and these guys are way under the radar. Very alarming that they are pulling out their vines because not profitable.