// Naked Wines ups profit guidance after a strong trading performance
// Revenue was flat during the period and sales in the UK
Naked Wines has lifted its profit guidance after a “solid trading” performance for the quarter ended 26 December 2022.
The online wine retailer now expects FY adjusted earnings before interest and tax of £13 million to £17 million, up from previous guidance between £9 million and £13 million.
Revenues in the third quarter were flat on the same period a year ago.
Sales in the quarter ending December just ended were unchanged from a year ago, Naked Wines said, as a 3% rise in repeat sales offset a 27% drop in new customer spending.
Subscribe to Retail Gazette for free
Sign up here to get the latest news straight into your inbox each morning
Revenue was flat during the period and sales in the UK and Australia fell by 1% and 3% respectively, while sales in the US grew by 2%.
New customers dropped by 27% and Naked Wines said it expects to spend between £20 million and £24 million on new customer investment this year, which is 40% below financial year 2022 levels.
As a result, the company forecasts it will see a “modest decline in revenue” in financial year 2024.
Naked Wines CEO, Nick Devlin said: “We have executed well against our pivot to profit in our key holiday quarter delivering flat reported revenue vs prior year (-6% constant currency), improving year-on-year repeat customer contribution margins and tightly controlling our SG&A 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.
However, the consumer and marketing environment remains challenging and opportunities to invest in new customer recruitment at attractive payback levels continue to be limited.”
