The California winemaker Robert Mondavi has reported net income of US$9.8m for the quarter ended September 30, 2003, compared to net income of US$8.1m a year ago, as a turnaround strategic plan begins to kick in.
Net revenues for the quarter increased 5% from the same period last year to US$103.9m, reflecting a 2% increase in shipment volume and positive mix from strong Robert Mondavi Winery sales and new brands, the group said.
“Last March we announced a plan to increase topline growth, streamline operations and reshape our organizational structure to develop a clear line of sight to the consumer,” said R. Michael Mondavi, chairman of the board. “This quarter, we made excellent progress in executing the plan.”
Gregory M. Evans, president and CEO said: “We were encouraged to see strong growth from our core wines and our new brands as reflected in overall wholesale depletion growth of 6 percent and price per case growth of 3 percent. In addition, overall profit margins improved, reflecting recent steps to make the company more efficient.”
The company warned that the US wine market is likely to remain intensely competitive for the next 12 months, but said it is continuing to grow.
“We see several positive signs: the US economy is showing signs of improvement, particularly in the travel and entertainment sectors where Robert Mondavi is well-positioned; and industry sources now estimate the 2003 California harvest to be smaller than previously expected, which should help the industry recover from its oversupply of grapes sooner,” added Evans.
The company maintained its fiscal 2004 revenue growth guidance of 5% but raised its earnings guidance by $0.06 per share to between $1.86 and $2.01 per share, reflecting the gains from asset sales during the quarter.
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