Schwab Family Wines reports reports total revenue of $15/9 million in the three months ended May 31, a 34% increase from $11.9 million a year earlier. But the company, for reasons that are not clear to us, post a net loss of $2.2 million versus a profit of $15.1 million a year earlier.
Cased goods sales increased 36%, bulk wine sales increased 41%, and winery processing and storage revenues increased 60% from the previous year. Overall increases in revenues were partially offset by gross margin decreases from 24% in the 2021 period to 22% in 2022. Margins decreased primarily due to changes in product mix, as well as increases in material costs. Total gross profit increased 24%.
Sales and marketing expenses increased 25%, from $2.8 to $3.5 million, as the Company continued its investment in the marketing of new brands and territories. The Company recognized a gain of $23.8 million from the sale of vineyard properties in the first quarter of fiscal 2022. The net loss before the effects of the gain on vineyard sales and income taxes totaled $2.8 million in the first quarter of fiscal 2022 of as compared to a net loss before income taxes of $3.1 million in fiscal 2023.
As noted, it’s not clear to us why the company posted a loss. We’ve asked, and will let you know when we get an answer.