Naked Wines PLC (AIM:WINE, OTCQX:NWINF) has upped its underlying profits forecast for the current year after healthy sales to existing customers kept revenues flat in its latest quarter.
As a result, the AIM-listed group now expects underlying profits (EBIT) of between £13-17mln, against £9-13mln previously.
The online wine merchant had a reset in October when it abandoned its growth-at-all-costs strategy to focus on profitability.
At that time, it predicted sales in the year to end March 2023 would drop by 4-9% to £340-360mln and be accompanied by £12mln of one-off stock and cost cuts.
Sales in the quarter ending December just ended were unchanged from a year ago, Naked Wines said, as a 3% rise in repeat sales offset a 27% drop in new customer spending.
US repeat sales especially improved, added the statement.
Even so, Nick Devlin, chief executive, said the trading backdrop remains challenging and it is tightly controlling costs.
Overheads (SGA) are now at the bottom end of revised forecasts while customer investment will fall 40% to £20-24mln over the next 12 months.
Operational improvements such as warehouse automation have also helped, Devlin added, while the expected one-off cost of £12mln this year is unchanged.