Naked Wines: 2023 revenues likely to rise but challenging times still ahead
Naked Wines increased its full year earnings estimates upward to between £13 and17m, compared to previous guidance of around £9m to 13m.
In a trading update for the quarter ending 26 December 2022 Naked Wines said it expected trading performance to remain flat, trading compared to the previous year.
There was no change to a one-off restructuring bill of 12m and its 2024 forecasts were under review in light of “lower levels of customer recruitment.”
Last autumn Naked Wines announced a shake up of its business in a bid to cut costs, including 30 redundancies.
Last October the wine retailer also admitted making mistakes” while pursuing “rapid growth.”
Low consumer confidence and high levels of supply chain inflation had resulted in an underwhelming performance for the London-listed firm.
Nick Devlin, group chief executive, said: “We have executed well against our pivot to profit in our key holiday quarter delivering flat reported revenue vs prior year improving year-on-year repeat customer contribution margins and tightly controlling our SG&A (overheads) expenses.”
“Against a challenging market environment the robust performance of our repeat customers reflects the enduring appeal of Naked’s core proposition combined with strong operational performance – with increased throughput from our investment in warehouse automation supporting an especially strong peak in the UK.”
Devlin added he expected to spend £20m to 24m on new customer investment during , around 40 per cent below full year 2022 levels.
“This is below the run rate necessary to maintain our current scale and we are likely to see a modest decline in revenue [during 2024] as a result.
“As we enter our detailed FY24 planning cycle we will be evaluating a number of options to improve this outlook while remaining disciplined in our approach to investment evaluation and capital allocation.”