Naked Wines reports an 81% increase in sales as COVID-19 restricts people to their homes

Naked Wines (LON: WINE) said on Wednesday that its sales in the last two months (April and May) came in 81% higher versus a year ago. The company attributed the unparalleled increase in revenue to the Coronavirus pandemic that restricted people to their homes and fuelled orders from British households.

Shares of the company were reported about 4% up in premarket trading on Wednesday and jumped another 3% on market open. At 388 pence per share, Naked Wines is currently 70% up year to date in the stock market after recovering from a low of 204 pence per share in March. Learn more about stocks and the stock market.

Naked Wines temporarily placed new orders on hold in May

The online wine seller said that an unprecedented increase in sales last month pushed it into temporarily putting new orders on hold.  As per Naked Wines:

“We entered the new financial year with good momentum as COVID-19 has influenced customer shopping behaviour and driven increased demand for the Naked Wines offer.”

The ongoing health crisis did not weigh on wine production or grape harvests at large in the United Kingdom, and have continued unaffected in recent months. The recently appointed CEO of Naked Wines, Nick Devlin, commented on Wednesday that the pandemic is quickly changing consumer preferences with people increasingly turning to the internet to purchase wines.

Owing to uncertainties related to COVID-19 and consumer behaviour once the pandemic subsides hopefully in the 2^nd half of the current financial year, however, Naked Wines refrained from giving its annual financial guidance on Wednesday.

Naked Wines’ CFO to take over the role of the company’s director

In separate news, the Norwich-headquartered company also announced that its CFO, James Crawford, will exit the role and take over the position of the company’s director.

In the fiscal year ended on 30^th March, Naked Wines printed its profit after tax at £8.2 million as compared to a £9.4 million loss in the previous year. In terms of revenue, the company posted a 13.7% year over year increase to £202.9 million.

For fiscal 2021, Naked Wines forecasts its fixed costs to fall in the range of £28 million to £30 million. Such costs are likely to be attributed to increased spending on marketing, expanding headcount, data science, and other finance-related expenditures.

Naked Wines performed slightly downbeat in the stock market last year with an annual decline of about 6%. At the time of writing, the online seller of wines has a market cap of £282.76 million.