Virgin Wines has blamed a host of macroeconomic factors, including spiralling inflationary and other cost pressures, after issuing a profit warning.


Virgin Wines issued the profit warning despite reporting a 55% increase in sales for the period

In a trading update for the six-month period ending December 31, 2021, Virgin Wines said it expected both profits and sales to be lower than consensus for the financial year to June due to an “uncertain trading and macro environment, coupled with numerous headwinds in relation to increased cost pressure”. 

The pureplay wine specialist issued the profit warning despite reporting a 55% increase in sales for the period to £40.5m. 

Repeat sales from core channels were up 6.2% year on year to £29.6m, while Virgin Wines reported an 11% increase in its WineBank membership. Total subscription sales accounted for 79% of all direct-to-consumer sales in the period. 

The retailer finished the period with a net cash position of £13.6m. 

Virgin Wines chief executive Jay Wright said: “As expected, the trading environment has evolved considerably over recent months and, given strong prior year comparatives, we have worked hard to maintain encouraging growth from our core sales channels while maintaining strict discipline around our customer acquisition and our cost control. 

“This performance continues to reflect the strength of our award-winning consumer propositions, the ongoing loyalty of our existing customers, the quality of our wines and our growing reputation for outstanding customer service. We are also pleased to report that the customers acquired during the Covid lockdown period continue to perform strongly.

“We were delighted to ship more than 7 million bottles of wine during the period and to deliver sizeable growth in our customer base, with strong levels of customer conversion and retention.

“Despite current headwinds, we look forward to the future with optimism. We have a range of leading consumer propositions with more and more people experiencing the benefits of buying delicious, great-value wine online through our subscription models. We also have strong growth in our commercial channel and a clear strategy for continued long-term, profitable growth.”

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