Naked Wines Reports Stronger Profit and Cash Generation

Naked Wines said on Wednesday that its fiscal 2026 performance was in line with guidance, as the online wine retailer reported stronger adjusted EBITDA, higher cash generation and inventory at its lowest level in five years.

The company, which sells wine directly to consumers in the United Kingdom, the United States and Australia, said revenue for the 12 months ended March 30 was expected to be about £200 million. That would put sales at the low end of the range it had previously outlined, but management said the result reflected a deliberate shift toward a smaller and more profitable core business.

Adjusted EBITDA was expected to land toward the top end of the company’s guidance range of £5.5 million to £7.5 million, excluding inventory liquidation and related costs. Naked Wines said the improvement came from price increases and cost cuts that took hold during the fourth quarter and should have a larger effect in fiscal 2027 as those changes annualize.

Net cash, excluding lease liabilities, rose £3 million to £33.4 million, helped by £9 million in cash generation and partly offset by £6 million in share buybacks. The company said it expects year-end net cash excluding lease liabilities to be within its earlier guidance range of £31 million to £35 million.

Inventory continued to fall as the company worked through excess stock and tightened operations. Naked Wines said inventory was now at its lowest level in five years, a sign that it has made progress in reducing working capital tied up in wine purchases and storage.

The company also said it had now put in place £25 million of annualized savings, exceeding its earlier target of £23 million set in March 2025. About £5 million of those savings came from general and administrative expenses and were tied to a zero-based budgeting process that began in the fourth quarter of fiscal 2026.

Naked Wines said it is also changing its technology setup. The company plans to move from its legacy in-house digital architecture to a third-party platform after recent advances in software-as-a-service systems made that option more attractive. Management said the new platform should improve site performance, marketing efficiency, conversion rates and customer acquisition economics, while also strengthening resilience and security.

The transition is expected to create temporary implementation costs, but Naked Wines said those costs should be offset by the newly identified G&A savings. The company added that the platform move could deliver up to £5 million in annualized operating expense savings by late fiscal 2029, though that figure is not included in the £25 million already announced.

Because of the shift away from an internal technology asset, Naked Wines now expects to record a non-cash adjusted item of about £2 million to £3 million in its fiscal 2026 results. It also said capitalized technology development spending for fiscal 2027 through fiscal 2030 is now expected to be about £1 million, down from as much as £7 million previously guided.

Chief Executive Rodrigo Maza said the company had delivered a strong year and that decisions made during fiscal 2026 would materially improve profitability over time. He said Naked Wines was entering fiscal 2027 with momentum.

The company reiterated its medium-term guidance for inventory liquidation and related costs at about $17 million, including bulk and cased goods, excess overhead absorption and storage expenses. It also repeated that implementing the fiscal 2026 savings would likely create an exceptional cost of £2 million to £3 million during the year, with up to another £3 million of digital transformation exceptional costs.

Naked Wines said it will provide guidance for fiscal 2027 when it reports audited full-year results this summer.