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| Majestic Wine shares dive on profit warning | Majestic Wine shares dive on profit warning |
| (about 2 hours later) | |
| Shares in Majestic Wine have sunk by nearly a quarter after it warned its profits would be lower than expected. | |
| The wine retailer said it had been hit by the costs of a failed marketing campaign for its Naked Wines business in the US. | The wine retailer said it had been hit by the costs of a failed marketing campaign for its Naked Wines business in the US. |
| The company has also suffered from a poor performance by its commercial division, which sells wines to pubs and restaurants. | The company has also suffered from a poor performance by its commercial division, which sells wines to pubs and restaurants. |
| Majestic's share price was down 24% at 329p by Wednesday lunchtime. | |
| "It is very disappointing that two isolated factors are distracting from the great progress across the rest of the group," said chief executive Rowan Gormley. | "It is very disappointing that two isolated factors are distracting from the great progress across the rest of the group," said chief executive Rowan Gormley. |
| He added that Majestic was still "on track" to resume paying dividends this year, and reach sales of £500m by 2019. | He added that Majestic was still "on track" to resume paying dividends this year, and reach sales of £500m by 2019. |
| Majestic Wine currently has 210 outlets in the UK and two in France. Its Naked Wines business operates in the UK, the US and Australia. | Majestic Wine currently has 210 outlets in the UK and two in France. Its Naked Wines business operates in the UK, the US and Australia. |
| The company said that a direct mail campaign to attract more customers to Naked Wines in the US had not worked. The costs of this means the business will record a "small loss" in the current financial year after making a profit last year. | The company said that a direct mail campaign to attract more customers to Naked Wines in the US had not worked. The costs of this means the business will record a "small loss" in the current financial year after making a profit last year. |
| Majestic said its commercial division failed to grow sales in the first half of the year, and profit margins fell. It has now launched an internal review into the unit. | Majestic said its commercial division failed to grow sales in the first half of the year, and profit margins fell. It has now launched an internal review into the unit. |
| Analysts at Liberum downgraded their forecasts for the Majestic, but said the problems it faced "are more short term in nature and do not reflect anything more sinister". | Analysts at Liberum downgraded their forecasts for the Majestic, but said the problems it faced "are more short term in nature and do not reflect anything more sinister". |
| "The core Majestic Retail business is on track and on target and Naked Wines in the UK and Australia is growing according to plan." | "The core Majestic Retail business is on track and on target and Naked Wines in the UK and Australia is growing according to plan." |