Earlier this month, management elected a new non-executive chairman, Ted Hall. As the first non-Mondavi in the position, Hall's appointment was seen as reassurance of the firm's commitment its stockholders -- not just those whose last name begins with a big "M." (There are some pretty famous fraternal squabbles in Mondavi lore.) Clearly, the company feels the need to shake things up, and with good reason.
It's been a tough couple of years for American wine makers, including Mondavi rivals UST
Mondavi's revenue growth was similarly slim: 4% on a 3% rise in shipments. Management admitted that it doesn't see the wine market changing much for the rest of the year, which doesn't bode well for the near future. The firm reiterated 2004 guidance with a top guess of $1.78 per share, so the stock trades at least 20 times forward earnings. That looks too pricey, given the cutthroat nature of the wine business these days.
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Seth Jayson grew up in Virginia, Minn., home to the original Mondavi vintner, Cesare. He remembers sordid tales of Cesare's move from Virginia to California. Send your folk tales to Seth via email.