Naked Wines has increased its underlying profits forecast for the current financial year, despite trading backdrop remaining “challenging”.
In its trading advert for the quarter ended 26 December 2022, the online wine retailer reported a 3% rise in repeat sales, which was offset by a 27% drop in new customer spending.
This comes as the retailer abandoned its growth-at-all costs strategy to focus on profitability.
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As a result, the company predicted sales would drop by 4-9% to £340 million to £360 million. This figure is also accompanied by £12 million of one-off stock and cost cuts.
Naked Wines group CEO, Nick Devlin added that the firm predicts to spend £20 million to £24 million on new customer investment in FY23, around 40% below FY22 levels.
“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,” Naked Wines group CEO Nick Devlin said.
“However, the consumer and marketing environment remains challenging and opportunities to invest in new customer recruitment at attractive payback levels continue to be limited.
Costs have remained tightly controlled with selling general and administrative (SG&A) spend outlook at the bottom end of its guidance, Naked Wines revealed.
