Naked Wines slashed its annual revenue and profit forecasts on Tuesday and said CEO Nick Devlin will leave the online wine seller as it bleeds customers in the United States, sending its shares plunging over 20%.
Revenue for the year is expected to fall between 12% and 16% from year-ago levels, while adjusted operating profit is expected to come in between 2 million and 6 million pounds (€2.3-€6.9 million), the London-listed firm said.
The group had previously forecast an 8-12% fall in revenue and profit of between £8 million (€9.2 million) and £12 million (€13.8 million) for the full year.
"Current trading in the US has fallen well behind, both in terms of sales and margin," said founder-chairman Rowan Gormley, who will take on the role of executive chairman until the appointment of a new CEO.
Naked Wines operates across the US, the UK and Australia, with US accounting for roughly 48% of total revenue. In the first-half, sales in the US fell by 20%.
"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," Gormley said.
CEO Steps Down
Devlin, who will step down as CEO with immediate effect, will continue as president of Naked Wines USA through the trading season, the company said.
The company's shares were down 20.6% at 35.75p as of 0808 GMT.
Naked wines uses a business model that aims to connect everyday wine drinkers with the world's best independent winemakers.
Its customers commit to a fixed prepayment each month which goes towards their next purchase. Naked Wine, in turn, funds the production costs for winemakers, generating savings that are passed back to its customers.
The intention is to create a 'virtuous circle' that benefits both wine drinker and winemaker.
In the last financial year, Naked Wines served more than 867,000 Angel members in the US, UK and Australia, making it a leading player in the fast-growing direct-to-consumer wine market.
Its customers (or Angel members) have direct access to 293 global independent winemakers making over 1,800 wines in 21 different countries.
Article by Reuters, additional reporting by Hospitality Ireland.