Winc Inc. reports third quarter net revenue increased 3.4% to $18.5 million, but the company’s net loss was $5.7 million, a 338.4% increase. Marketing expenses decreased by 23.3% to $3.7 million as the Company throttled advertising spend to maintain efficient marketing payback. Personnel expenses were $7.2 million3.2 times as large as $2.1 million in the same period in 2020, with $4.2 million of the increase attributable to non-cash items including stock-based compensation. General and administrative expenses rose 71.3% to $3.0 million due to increased expenses for professional services in support of the Company’s recent initial public offering (the “IPO”) and growth-related expenses.
Geoff McFarlane, CEO, said the results were in line with expectations. “Winc’s wholesale channel has been strong throughout 2021 with revenues increasing 106.9% in the third quarter of 2021 compared to the third quarter of 2020, 96.4% in the first nine months of 2021 compared to the same period in 2020, and 200% on a two-year stack basis.
“New retailer relationships are resulting in the rapid expansion of the number of locations where customers can find Winc products while performance continues to improve at existing retail partners,” he said, adding that recent placements at Walmart, Target and Trader Joe’s helped grow our active retail account base to 11,476, and we believe that continued investment in these relationships will allow us to reach our goal of 50,000 active retail accounts over the next several years.”
“Our existing portfolio of 5 core brands continues to grow, reaching 44,797 cases in the third quarter of 2021 and strong performance from Pizzalto, Les Hauts De Lagarde, and Cherries and Rainbows, which leads us to believe that each will become core brands by the end of 2022,” Winc President Brian Smith added.
“The additional scale of these three products would bring Winc’s ever-growing and diversified suite of proprietary core brands to a total of 8. Our flagship brand, Summer Water, continues to see strong overall sales and retail placement growth. Of all rosé wines reported on in the Nielsen Wine Report, Summer Water has the 4th highest sales growth rate and second smallest all-commodity volume, suggesting that the brand is under-penetrated and has continued growth opportunity through door expansion, especially considering it’s highly competitive growth rate at existing placements.”