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Unlike its grapes, Winc didn’t exactly crush its latest earnings report.
The wine subscription company revealed on Wednesday that its total revenues rose by 3.4% to $18.5 million during its third quarter, but the money it makes from direct-to-consumer sales took a hit, slipping 13% to $12.7 million from the same period last year.
Winc tailors recommendations to shoppers' palates and produces as many as 10 new brands per year, using data gathered on customers and their ordering habits. Its best-selling brands include Summer Water and Wonderful Wine Co.
The decline in direct sales to consumers, which Winc depends on, suggests that a surge of demand spurred by the pandemic has waned. However, Winc’s sales through Whole Foods, Walmart, Target, Trader Joe’s, and restaurants are on the rise. The company buoyed its total revenue via its wholesale business, where revenues spiked nearly 107% to $5.5 million.
Winc still lost money. The company reported a net loss of $5.7 million for the quarter, up 338% from Q3 2020.
Less than a month ago, Winc raised $22.1 million in a downsized IPO and debuted on the New York Stock exchange at $13 per share. The stock peaked at $14.20 that day and has steadily declined ever since.
During regular trading today, Winc’s share price slipped by more than 4% to $8.10.
Winc told investors earlier this year that it benefited from a “significant increase in DTC demand due to changes to consumer behaviors” amid stay-at-home orders. Stuck in their homes, shoppers sent online wine sales surging during lockdowns. “Industry research and steady consumer demand lead management to believe that this is a permanent shift in consumer behavior,” the company said at the time.
However, CEO Geoff McFarlane said in a statement on Wednesday that Winc “benefited from abnormal COVID tailwinds” last year.
"Third quarter results were in line with our expectations as strong growth in wholesale more than offset tough comparisons in our DTC business," he said.
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Pour one out for Winc.
The wine subscription company behind Summer Water and Wonderful Wine Co started trading on the New York Stock Exchange on Thursday and received a tepid welcome from investors. The stock debuted at $13 per share and climbed to a high of $14.20 before closing at $12.27, down by about 5%.
Winc tailors wine recommendations to shoppers' palates. It essentially operates a wine-brand factory, popping out as many as 10 new brands per year informed by data gathered on customers and their ordering habits.
Winc originally sought to sell five million shares in October, priced between $14 and $16, to raise about $80 million. But the Santa Monica-based company quietly postponed its debut. It ultimately sold 1.7 million shares this week, raising $22.1 million.
Winc's direct sales surged during the pandemic, as lockdowns drove oenophiles to hunt for bottles on the internet. But Winc has cautioned that another global crisis, climate change, poses a threat to its bottom line.
Extreme weather fueled by climate change "could negatively impact the quality and quantity of grapes available to us and our producers for wine production," the company said in a regulatory filing.
Now trading under the symbol WBEV, Winc said in a statement that it's "excited for the next phase of our journey, which involves pushing industry boundaries, continuing to make great wine, and ensuring you always have great glass in hand." The company did not respond to a request for further comment on its downsized IPO.
.@WINC (NYSE: $WBEV) opens on the New York Stock Exchange at $13 pic.twitter.com/6yrOU5cT0U
— NYSE 🏛 (@NYSE) November 11, 2021
This story was updated after trading closed on Thursday and was corrected to reflect that Summer Water is a Winc brand, while Yes Way Rosé is not.
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Santa Monica-based wineseller Winc has postponed its expected debut on the New York Stock Exchange.
The IPO was anticipated for this week, valuing the company at around $263 million. Instead, it has been pushed to a later, unknown date, a NYSE spokesperson confirmed in a call with dot.LA. As of Friday afternoon, Winc's expected stock symbol — "WBEV" — was still reserved in the exchange's system, the spokesperson said. Winc did not respond to a request for comment.
Winc offers a wine subscription service tailored to shoppers' palettes. Through collaborations with vineyards and other brands, the company said it aims to churn out as many as 10 new wine brands a year, according to an SEC filing released last week.
Winc aimed to sell five million shares at a price between $14 and $16 that would have netted about $80 million. It also offered its underwriters additional shares worth about $12 million.
As the pandemic shuttered storefronts, Winc saw the upside of an online sales boom. Between subscriptions and deals with wholesalers, the firm says it sold more than 430,000 cases of wine in 2020, up 80% from the prior year.
But while that global catastrophe seems to have helped Winc, another crisis poses a threat to both the firm and the wider wine business.
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