Willamette Valley Vineyards reported third‑quarter 2025 results that saw revenue fall to $8.35 million, a 10.9% decline from $9.37 million in the same period last year. The decline was driven by a $384,420 drop in direct‑to‑consumer sales and a $633,093 decrease in distributor sales, reflecting weaker demand across both channels and a shift toward lower‑margin products.
Gross profit slipped to $5.00 million, down 13.8% from $5.81 million in Q3 2024. The compression was largely a result of higher cost of goods sold, driven by inflation in raw materials and increased labor costs associated with the company’s recent vineyard and facility expansion. The higher cost base eroded the 59.9% gross margin that the company enjoyed in the prior year.
Selling, general and administrative expenses rose 4.6% to $6.22 million, up from $5.94 million in Q3 2024. The increase was concentrated in marketing spend for new product launches and higher administrative overhead linked to the expansion of production capacity. Interest expense climbed 15.2% to $304,957, reflecting the additional debt taken on to fund the growth initiatives announced earlier in the year.
Net loss widened to $1.09 million, an increase of 286% from the $282,945 loss reported in Q3 2024. The loss per common share after preferred dividends rose to $0.33 from $0.17. The sharp deterioration in profitability is attributable to the combined effect of revenue decline, margin compression, and higher operating costs, all of which outweighed the company’s efforts to control expenses.
Management emphasized that the company is navigating a challenging market environment. Founder and President Jim Bernau noted that “the third quarter continues to reflect the need for creative solutions as the wine market in both direct sales and distributor sales change.” He added that the new CEO, Mike Osborn, is steering the firm toward new product experiences and strategic investments aimed at restoring profitability. The company has not issued forward guidance, but the leadership signals a focus on cost discipline and channel optimization.
The results underscore the short‑term financial pressure resulting from aggressive expansion and a softer market. While the company’s revenue decline and widening loss signal headwinds, the management’s emphasis on innovation and channel efficiency suggests a strategy to regain momentum in the coming quarters. Investors will likely monitor the company’s ability to convert the expansion into higher margins and the effectiveness of its cost‑control initiatives.
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