Coronavirus

Naked Wine hails ‘strong’ sales performance

Naked Wines has announced it is continuing to “trade strongly” despite the crisis, with total July sales expected to be up by 73% against the prior year. 

This would bring its sales growth in the first four months of the financial year to 76%, overall.  

According to the retailer, this was largely driven by the fact that new customer sales soared 185% in the period, while investment in new customers was up by 115%. 

Repeat customer sales rose by 58%, meanwhile, with a sales retention of 91%. 

In addition, the group also delivered a 3% percentage point improvement in repeat contribution margin.

Nonetheless, in light of the “significant uncertainty” ahead, the group will continue to maintain a range of active scenarios for the full-year that “include both more optimistic and pessimistic scenarios”.

It currently predicts that it will see the heightened levels of new customers and repeat purchase frequency decline over the rest of summer, though still entering peak trading with an increased customer base and more normalised trading patterns.

In light of this, it now anticipates that total sales growth for the full-year will be around 40%, while repeat customer contribution will fall between £65 and £70m.

In addition, it believes that total investment in new customers will fall between £35 and £40m, at lower year-on-year margins, while fixed costs will be between £32 and £34m.

The retailer now intends to “remain committed” to maximising investment in new customer acquisition, as well as inventory and operational capacity to support this.

Nick Devlin, CEO, said: “I’m pleased to report continued strong rates of new customer growth and particularly strong repeat trading momentum as we see evidence of new customers recruited during the Covid-19 pandemic converting to repeat customers. 

“I’m especially grateful for the incredible work of our teams around the world who have enabled us to deliver this step change in performance under challenging operating conditions.”

He added: “The evidence we are seeing across our markets is consistent with our view that Covid-19 has served as an inflection point for the online wine market, with Naked uniquely placed to benefit from that. 

“We have the balance sheet strength and operational agility to enable Naked to continue to focus on ways to accelerate growth and take advantage of the opportunities presented by the new and evolving consumer landscape.”

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