Naked Wines shares plunge after wine availability falls below targets

The company’s rapid recent growth has stalled as shoppers returned to traditional outlets.

Naked Wines’ shares slumped as it reported slower growth than expected (Naked Wines/PA) (PA Media)

Naked Wines shares slid by a fifth as wine availability problems caused by supply chain pressures weighed on new customer growth.

The company’s rapid recent growth stalled as shoppers returned to supermarkets and traditional bottle shops.

It said it expected to report sales of between £340 million and £355 million for the current full year as a result, downgrading from its previous expectations of between £355 million and £370 million.

Naked said it had built up stock levels to reduce pressure on imported wines, but suffered weaker availability and delivery levels than it had hoped.

The company told shareholders: “Despite operational action to mitigate impacts, wine availability and delivery measures were below our targets for substantial parts of the period, impacting customer experience and new customer growth.”

It added that it “would have liked to invest more in new customers” over the past half-year, but decided to contain its growth investment after witnessing “higher than anticipated” costs related to reaching new customers.

Nick Devlin, group chief executive, said the business was now “well stocked and prepared for what we anticipate to be a record holiday season”.

The news came as the company revealed a 1% increase in sales to £159.3 million for the half year to September 27.

Mr Devlin added: “I’m delighted by the progress we have made so far this year in further strengthening our winemaker line-up and customer proposition.

“We are now serving a global community of 947,000 members – an increase of 25% over the last year – reflecting sustained consumer desire for an alternative to traditional wine distribution.

“We are focused on delivering an incredible experience for our members and on continuing to invest to grow Naked Wines and connect more wine drinkers to the world’s best independent winemakers.”

Shares in the company were down 20.7% to 535p after early trading.