Online booze specialist Naked Wines lost over 40% of its value on Thursday despite solid annual results, as its gloomy outlook spooked the City.

Despite comparisons with the booming Covid period, the group still posted a 5% constant currency rise in annual sales in the year to 28 March to £350.3m, representing two-year growth of 78%.

The consolidation of Covid gains was driven by strong retention and demand from existing subscribers, as repeat customer sales increased 13% on a constant currency basis to £315.1m.

However, those gains were partially offset by a sharp decrease in new customer sales. This reflected a drop in customer acquisition costs – down from £50m to £41.2m – and lower marketing spend. That cut in expenditure helped overall adjusted EBIT rebound to a profit of £2m from a £1.5m loss last year.

However, City sentiment was hit by lower-than-expected sales and earnings forecasts.

Firstly, margins from repeat customers is coming under pressure due to elevated distribution and storage costs. Secondly, the five-year payback on new customers remains well short of historic levels given Naked’s previous drive for “’volume of new members at the expense of quality”.

Taken together with the expected continued fall in new customers, Naked guided to broadly flat revenues of £345m-£375m – lower than analysts had forecast. Meanwhile, adjusted EBITDA will fall back to break even.

Liberum said the outlook reflected concerns over its resilience to wider economic weakness, noting: “There is a risk heading into a downturn that weak demand and potential cancellations combine to force the company to discount stock more in an attempt to turn inventory into cash.”

However, Jefferies said the results marked a “relatively resilient year given the backdrop” and remained upbeat despite the lower than expected forecasts.

“The combination of short-term cost headwinds and underlying payback shortfalls is rightly seeing the model tweaked… Naked continues to be a very well-positioned business, with a vast total addressable market and a proposition that is both differentiated (particularly in the US) and advantaged for customers and winemakers,” it said.

Naked shares plunged 41.3% to 168.6p on Thursday – wiping out all its pandemic gains and posting a new low for the stock. Naked shares had reached 895p in the summer of 2021.