Nov. 14 (Bloomberg) -- Majestic Wine Plc, which owns the U.K.’s largest chain of wine warehouses, fell the most in three months in London trading after saying its October sales were worse than expected.
Shares declined 16 pence, or 3.9 percent, the most since Aug. 3, to close at 400 pence, giving the Watford, England-based company a market value of 253.7 million pounds ($403 million).
Sales in stores open at least a year fell 1.1 percent in the six weeks ended Nov. 7 on “disappointing” sales in two weeks in mid-October, the company said in a statement today. Revenue dropped compared with higher-than-usual sales the previous month, Chief Executive Officer Steve Lewis said in a telephone interview.
“People spent very well in late September because we had excellent weather and people were holding back” in October “for Christmas promotions,” Lewis said. Sales have picked up since the company began price promotions for the holiday season two weeks ago, he said.
Net income gained 23 percent to 6.27 million pounds in the 26 weeks ended Sept. 26, compared with a year earlier, the company said. Sales rose 8.7 percent to 127.8 million.
“Majestic Wine has reported numbers a shade light of our expectations,” London-based analysts led by Ben Hunt at Oriel Securities said in an e-mailed note to clients today. “Current trading has fallen into negative territory” and “we remain concerned that higher pricing is affecting volumes,” they said, maintaining a “hold” rating on the company.
A bottle of wine at Majestic costs 7.13 pounds on average, compared with 4.76 pounds elsewhere in the U.K., Lewis said.
Majestic will open 16 stores in the U.K. by the end of the year, Lewis said. The company said in June it planned to increase store numbers in the U.K. to at least 330 from 165.
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