Naked Wines to beat FY revenue forecasts as Covid-19 boosts sales

(Sharecast News) - Naked Wines - which operates in the UK, US and Australia - said on Thursday that full-year revenue is set to be "slightly" ahead of consensus expectations as coronavirus lockdowns boost demand.
The company said it has extended delivery times in all of its markets to meet increased demand. "We believe we have adequate stock availability and additional stock continues to move through our supply chains," it said.

It noted that since government restrictions on social gatherings were put in place, there has been a rise in demand from both new and repeat customers in all of its markets, particularly the US. As a result, it now expects to report FY20 revenue in excess of ?200m, which is slightly ahead of current consensus of ?198.9m.

Naked Wines said it has continued to invest "aggressively" in new customer recruitment and now expects total investment for FY20 to be towards the middle of the ?20-25m range indicated in the interim results.

The company said it was operating "from a position of financial strength". As at 30 March, it had over ?50m of cash and no debt, and has not seen any material change in patterns of customer funds withdrawals.

Chief executive Nick Devlin said: "In the short term, the introduction of social distancing has accelerated the shift in consumer buying behaviour towards online, leading to increased demand from both new and existing customers across all our markets.

"In the US, especially, I believe the current period could serve as an inflection point for the growth rate of the online category, and as the largest direct to consumer player in the US market we are well positioned as customers move online. Over the medium-term, Covid-19 and its economic impact clearly creates uncertainty. However, Naked, with its advantaged consumer proposition and strong balance sheet is well placed to meet the challenges of a changing consumer environment."