Naked Wines PLC (AIM:WINE, OTCQX:NWINF) has reassessed its full-year guidance following an underwhelming first half for the AIM-listed wine-subscription company.
Firm-wide sales fell by 17%. Despite the UK and Australian markets performing in line with expectations, US sales were weaker than expected with a 20% year-on-year dip.
Full-year sales for 2024 are now expected to decline between 12% and 16% year on year, with underlying earnings expected to close between £2 million and £6 million (previous guidance was between £2 million and £8 million).
Naked Wines ended the first half with £3 million in net cash and £45 million of additional liquidity available through its credit facility.
The group intends to convert excess inventory into cash over the next 12-18 months given its materially reduced inventory commitments.
Alongside today’s trading update, Naked Wines announced that chief executive Nick Devlin has agreed to step down as chief executive with immediate effect, with founder and executive chairman Rowan Gormley taking the role of executive chairman on an interim basis.
Gormley commented: "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. Nick has agreed to help with the transition and stay on as US President through peak.”
Gormley said he was “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."