Executive Summary

Q2 FY2024 was dominated by restructuring actions: revenue fell to $68.0M as management intentionally simplified the portfolio and reallocated resources; gross loss reflected a $32.3M inventory provision tied to narrowing the brand focus .
GAAP diluted EPS was $(0.83) versus $(2.19) a year ago, with adjusted EBITDA swinging to $(28.8)M from $5.0M in Q2 FY2023; cash from operations was a positive $11.9M as inventory and working capital were monetized .
Liquidity and leverage dominated the narrative: current debt stood at $305.6M at 12/31, and lenders agreed to a forbearance through at least March 31, 2024 (later extended publicly to May 15, 2024), enabling continued asset sale efforts and credit amendment talks; principal outstanding under the loan agreement was $324.3M as of Feb 29, 2024 .
Management reiterated the turnaround plan and an omnichannel focus on Super Premium+ offerings; they withdrew FY2024 guidance in Q1 and did not reinstate it in Q2, emphasizing simplification, asset monetization and debt reduction as near‑term priorities .

What Went Well and What Went Wrong

What Went Well

Cash generation: “Cash from operations in the second quarter was $11.9 million reflecting inventory reductions, aggressive efforts to collect receivables and carefully managing payables” .
Cost discipline: SG&A (ex‑amortization) decreased $6.9M to $25.3M on lower stock comp, reduced non‑core marketing, freight improvements and tighter controls .
Strategic focus and asset sale progress: CEO noted “numerous attractive indications of interest, bids and a non-binding letter of intent” for non-core assets, expecting simplification to “provide cash to reduce debt” and “substantially reduce costs” .

What Went Wrong

Topline pressure by design and demand softness: Net revenue declined $10.4M YoY to $68.0M as ~58% of the decrease stemmed from simplification actions (including $3.6M lower bulk whiskey sales), plus timing and softer end‑market demand .
Gross loss due to inventory actions: COGS included a $32.3M provision tied to non-core, aged and bulk wine inventory as the brand focus narrowed, resulting in a gross loss of $15.0M for the quarter .
Leverage and financing risk: The company had $21.4M cash and $305.6M of current debt at 12/31; while lenders granted a forbearance, management disclosed that acceleration would present a liquidity shortfall absent an amendment and asset sales .

Financial Results

Quarterly P&L Trend (oldest → newest)

Metric	Q4 FY2023 (Jun 30, 2023)	Q1 FY2024 (Sep 30, 2023)	Q2 FY2024 (Dec 31, 2023)
Revenue ($USD Millions)	$62.096	$73.274	$67.989
Gross Profit ($USD Millions)	$16.624	$24.700	$(14.983)
Operating Income ($USD Millions)	$(50.167)	$(9.861)	$(40.684)
Diluted EPS ($)	$(0.81)	$(0.25)	$(0.83)
Adjusted EBITDA ($USD Millions)	$(10.500)	$0.447	$(28.815)

Notes: Q2 gross loss driven by $32.3M inventory provision within COGS as the company narrows its brand focus .

Q2 FY2024 Segment Revenue vs Prior Year

Segment	Q2 FY2024 Revenue ($M)	Q2 FY2023 Revenue ($M)	YoY %
Direct-to-Consumer	$23.651	$26.472	(10.7%)
Wholesale	$17.786	$23.083	(22.9%)
Business to Business	$26.552	$28.814	(7.9%)
Total	$67.989	$78.401	(13.3%)

KPIs (Case Volumes)

KPI (9L equivalent, ‘000s)	Q2 FY2024	Q2 FY2023	YoY %
DTC Case Volume	106	125	(15.2%)
Wholesale Case Volume	357	453	(21.2%)
Total Case Volume	463	578	(19.9%)

Additional balance sheet/cash flow context: cash from operations was $11.9M in Q2; cash $21.4M and current debt $305.6M at 12/31/23 .

Actuals vs Street (Q2 FY2024)

Metric	Actual	S&P Global Consensus	Beat/Miss
Revenue	$67.989M	Unavailable	N/A
Diluted EPS	$(0.83)	Unavailable	N/A

Note: S&P Global consensus estimates for VWE were unavailable via our connector at the time of analysis.

Guidance Changes

Metric	Period	Previous Guidance (from Q4 FY2023)	Current (Q1 withdrawal; Q2 unchanged)	Change
Revenue	FY2024	~$260M–$270M	Withdrawn (Q1 FY2024)	Withdrawn
Gross Margin	FY2024	~38% (≈+800 bps YoY on lower volume)	Withdrawn	Withdrawn
SG&A (ex amortization)	FY2024	~$98M (ex restructuring)	Withdrawn	Withdrawn
Depreciation	FY2024	~$16M	Withdrawn	Withdrawn
Amortization	FY2024	~$6.1M	Withdrawn	Withdrawn
Restructuring Charges	FY2024	$5M–$6M	Withdrawn	Withdrawn

Earnings Call Themes & Trends (Narrative across Q4 FY2023 → Q1 FY2024 → Q2 FY2024)

Topic	Q4 FY2023 (Jul–Sep 2023)	Q1 FY2024 (Oct–Nov 2023)	Q2 FY2024 (Mar 2024 reporting)	Trend
Turnaround/Restructuring	Tightened FY2024 outlook; Five‑Point Plan highlighted (SKU reductions, price/mix, ops throughput)	New CEO prioritized Five‑Point Plan; withdrew FY2024 guidance	Accelerated restructuring; progress on asset sales (IOIs/bids/LOI)	Continued acceleration
Liquidity/Leverage	Amended credit agreement; mandatory prepayments detailed; ~$54M liquidity at FY end	Debt $309.5M current; ~40% hedged; availability on revolver; capex plan	Forbearance with lenders; $324.3M principal outstanding as of 2/29; extension publicly announced to May 15, 2024
Portfolio Simplification/SKU Rationalization	SKU cuts >50%; throughput +35% at Hopland; cost recovery improvements	Simplification continuing; DTC/Wholesale focus brands cited	$32.3M inventory provision tied to narrowing brand focus	Deepening focus
Channel/Brand Performance	DTC and Wholesale pressured; ACE distribution gains; macro destocking	Core brands (Bar Dog, Cherry Pie, Firesteed) growth; ACE stable revenue despite lower volume	Segment declines across DTC/Wholesale/B2B amid simplification and softer demand	Mixed; core brands emphasized
Operations/Working Capital	Ops efficiencies, pricing, inventory clean‑up	Restructuring costs; SG&A reduction efforts	$11.9M cash from ops; inventories down $44.1M QoQ (incl. $32.3M reserve)	Working capital monetization

Note: A Q2 FY2024 earnings call transcript was not available in the sources we queried; current-period themes reflect press releases and filings.

Management Commentary

CEO Seth Kaufman on strategy and asset sales: “We are intensely focused on our priorities to aggressively execute our turnaround plan… Cash generation in the second quarter validates our efforts to monetize inventory and better manage working capital… I am encouraged with the progress we are making with our asset sales process… numerous attractive indications of interest, bids and a non-binding letter of intent… The sale of these assets will provide cash to reduce debt… enable us to better deploy human and financial resources… resulting in a meaningfully smaller revenue base that can ultimately support faster growth while delivering profitability” .
Liquidity and lender engagement: “The forbearance agreement provides flexibility for the Company to continue executing the previously announced restructuring and transformation while working with its lenders on an amended credit agreement” .
Forbearance context (press release): “Lenders aligned on turnaround and restructuring plan; forbearance agreement provides time for amendment discussions” and plan to monetize non-core operations to reduce debt .

Q&A Highlights

A Q2 FY2024 earnings call transcript was not available through our document and web sources; as a result, Q&A themes and clarifications cannot be summarized for this quarter. Management’s press release remarks and 8‑K disclosures form the basis of this recap .

Estimates Context

Consensus (S&P Global) for Q2 FY2024 revenue and EPS was unavailable via our estimates connector at the time of analysis. Actuals are shown above from company filings; estimate comparisons are not provided due to data unavailability .

Key Takeaways for Investors

Balance sheet/credit is the near-term stock driver: forbearance and ongoing amendment discussions are critical; acceleration would pose a liquidity risk without asset sale proceeds .
Execution on asset monetization is central to the thesis: management reports active buyer interest and an LOI; successful sales could reduce debt and simplify operations, potentially lifting margins over time .
Structural simplification is pressuring near-term revenue but intended to reset the base: ~58% of Q2’s revenue decline was tied to simplification actions (including bulk whiskey), positioning for higher-quality mix .
Cash generation proof point: despite a large inventory provision, the quarter delivered $11.9M operating cash flow via working capital actions—sustaining this trend will be watched closely by lenders and equity holders .
Cost takeout is visible: SG&A reductions and operating efficiencies are tracking; monitor whether savings persist post divestitures and whether non-core exits reduce overhead burden as expected .
No active guidance: with FY2024 guidance withdrawn, trajectory will be judged quarter‑to‑quarter; focus on sequential mix/margin, cash conversion, and debt reduction against lender milestones .

Citations

Q2 FY2024 8‑K and press release:
Q1 FY2024 8‑K and press release:
Q4 FY2023 8‑K and press release:
Forbearance press release (Business Wire):

Vintage Wine Estates, Inc. (VWE)·Q2 2024 Earnings Summary