Wine Company Winc Reveals Rising Revenue, Declining Direct-to-Consumer Sales in Q3

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.