Naked Wines slashes full-year guidance as CEO exits

Naked Wines has lowered its full-year guidance amid a period of difficult trading, alongside news that CEO Nick Devlin is stepping down from his role with immediate effect.

With recent trading in the US being lower than expected, the group now expects full-year revenues to fall by 12% to 16%, down from a previously anticipated decline of 8% to 12%. Adjusted EBIT is also expected to be between £2-6m (previously £8-12m).

It comes as the group said that FY24 “started slower than expected”, with H1 revenues down by 17%. Over the period, UK revenues fell by 11%, while US and Australia sales were down by 20% and 19%, respectively.

Meanwhile, sales to new customers were 41% lower, “reflecting that the comparable period was prior to our pivot to profitability” and a reduction in new customer investment. Sales to repeat customers were also 15% lower, reflecting the smaller customer base year-on-year. 

While Q2 trading in the UK and Australian markets was broadly in line with forecasts, trading in the US during Q2 and October was weaker than anticipated. In particular, the group said that repeat business fell short of targeted revenues and contribution margins.

Amidst this, Nick Devlin has agreed with the board that he will step down as CEO immediately. Rowan Gormley, founder and chairman, will take the role of executive chairman on an interim basis until the board appoints a successor.

Devlin will continue in the role of president, Naked Wines USA through the peak trading period before he leaves the group fully, and the process to appoint a permanent CEO will commence immediately. 

Gormley said: “It is disappointing to be warning of underperformance against a recent forecast. While trading in the UK and Australia has been in line with the board’s expectations, current trading in the US has fallen well behind, both in terms of sales and margin. Customer attrition remains at historically low levels. 

“My view is that this shortfall is largely to do with execution, which in turn is largely due to Nick Devlin splitting his time across both the role of CEO and US president. To resolve this situation Nick has agreed to step down as CEO and I will move to executive chairman while we recruit a replacement.” 

He added: “Nick has agreed to help with the transition and stay on as US President through peak. I am sad to see Nick go, but his legacy remains. Naked Wines revenue has grown 50% since he took the CEO role, and Nick leaves with a lot of the hard turnaround work completed, including testing some exciting improvements to our customer proposition, which we are testing at scale right now. He goes with our best wishes.”