Shares in Naked Wines (LON:WINE) rose after the online wine retailer unboxed forecast-beating EBITDA for FY26.
The result demonstrated that the direct-to-consumer wine purveyor’s turnaround strategy is working and the company is on track to rebuild profitability.
The Norwich-based company reaffirmed FY27 guidance for continued EBITDA growth. And CEO Rodrigo Maza insisted ‘the best of Naked Wines is still ahead’.
Naked in a nutshell
AIM-listed Naked Wines is a direct-to-consumer wine retailer. The company funds production costs for winemakers upfront, allowing them to focus on creating exceptional wines without the financial burdens of traditional wine production.
The resulting savings are passing back to Naked Wine’s customers in the UK, US and Australia.
Results for the year to March 2026 showed a 20% drop in revenue to £199.1 million. This reflected a deliberate reduction in acquisition investment as well as attrition from the historic customer base acquired during Covid lockdowns.
Encouragingly, a 35% jump in adjusted EBITDA to £7.6 million was slightly ahead of guidance, with gross margins expanding from 18.4% to 19.9% thanks to price increases.
The result reflected progress with Naked Wines’ strategy of improving profitability through cost control, cash generation, and recalibrating around a smaller, more profitable core business. The group ended FY26 with £33.4 million of net cash, positive free cash flow and its lowest inventory level in five years.
Progressive growth promise
For FY27, Naked Wines guided for ‘progressive growth’ in adjusted EBITDA to between £7.6 million to £9 million. The company also guided for continued cash generation despite a planned reduction in revenues to between £158 million and £175 million.
However, Panmure Liberum’s Wayne Brown pointed out: ‘With the members base increasingly now made up of the highly engaged core members and higher quality recently acquired members, we expect the revenue decline to slow down to minus 6% in FY28. Revenue should steadily decline closer to stability thereafter.’
Best is still ahead
CEO Rodrigo Maza commented: ‘In FY26 we recommitted to what makes Naked different, and the results have followed. We grew adjusted EBITDA to £7.6 million, strengthened the balance sheet to £33.4 million of net cash, and returned over £6 million to shareholders by repurchasing more than 10% of the company to increase the intrinsic value per share for shareholders.’
Maza added: ‘As we continue to execute our strategy through FY27, member numbers and revenue will not yet have stabilised, but profitability, cash generation and the quality of our member base will continue to strengthen, laying the foundations for future stability and growth. The best of Naked Wines is still ahead.’
Naked Wines’ shares have shed over 90% of their value over a difficult five years since the pandemic-driven online wine buying boom faded. Statutory losses widened from £4.9 million to £6.3 million last year after restructuring costs and software write-offs.
But the good news is Maza’s turnaround strategy has traction. As such, the shares might interest the risk-tolerant investor.
Cost savings initiatives are running ahead of plan and the balance sheet has been rehabilitated. A strong cash position enables management to balance share buybacks with investments to grow the business. And Naked Wines is on track towards achieving its medium-term EBITDA target of £9 million to £14 million.
As Panmure Liberum explains: ‘Management continues to be focused on not chasing unprofitable new customer acquisition, which is the right decision for the long-term health of the business.
‘After cutting new customer acquisition spend in FY26, we expect acquisition spend to be cut further in FY27 with the aim to create a smaller but better and more profitable Naked Wines.’
Read the press release here: https://www.nakedwinesplc.co.uk/investors/default.aspx
