Naked Wines ups revenue forecast but challenges remain
Online retailer Naked Wines has increased its revenue forecast for the current year compared with a previous estimate, though challenges still remain in the face of reduced customer acquisition spend over the next 12 months.
Naked Wines has faced an embattled 12 months, with frequent changes at the top of its leadership team and unsteady share prices culminating in the online retailer making 30 employees redundant in an effort to cut costs and create a “leaner and more focused organisation”.
However, an adjusted underlying profits forecast for the current year paints a slightly rosier picture.
Naked Wines has increased its forecast for the year to between £13-£17 million, compared to previous guidance of around £9-£13 million.
Sales in the previous quarter ending December were flat year-on-year, with US repeat sales a positive point of improvement.
Group chief executive Nick Devlin 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 said Naked Wines would spend 40% less than 2022 levels on new customer acquisition, a total of £20-£24 million.
“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,” he added.
A one-off cost of £12 million to restructure and cut costs remains.