Naked Wines: Losses shrink but wine seller still has a way to go
Naked Wines has begun to stem its losses after a tough few years for the wine merchant, although the firm’s sales continues to shrink.
The company told the London Stock Exchange this morning that its revenue fell by 10.2 per cent year on year in the 13 weeks ended 30 December, or 8.9 per cent at constant currency.
This was an improvement from the 15.1 per cent drop reported in the first half of the year.
Revenue per member rose by two by cent versus prior year, reflecting “improvements in order frequency and average order value”, Naked Wines said.
“This is a positive initial sign for the group as declining order frequency had been a key driver of the declining sales retention rate over recent year,” Panmure Liberum analysts said.
CEO Rodrigo Maza said: “We are pleased with our performance during the important peak season, which was solid and featured improving trends and positive signals from KPIs supported by our strategic initiatives and testing plan.
“We are tracking in line with full year expectations, and look forward to providing a further update in March, including a plan focused on shareholder value creation.”
Panmure Liberum analysts rated the stock a ‘hold’ adding that “The path to recovery is becoming clearer,” and that the company’s strategy update in March will be “key”.
“If management can provide confidence on [free cash flow] at the March update, then the shares should start to recover rapidly”, analysts added.
Naked Wines struggled to burn through excess stock and suffered from sustained high inflation in key markets in 2023, which impacted their supply chain costs.
Revenue at the online wine retailer has already slumped 13 per cent in 2022, and it cut 50 jobs -including two board members—to shore up costs.
This followed a series of profit warnings and a £15m reported loss.