UK family fashion and lifestyle retailer, Joules, has experienced a slight decline in sales during the Christmas period. However, the company remains optimistic about its strong performance in the first half, citing robust sales and margins. Group sales decreased by 1.4% to £111.6 million for the 26-week period ending on November 24. This decline can be attributed to the timing of Black Friday, which fell in the second half of the financial year instead of the first half as it did in the previous year. When comparing a comparable 27-week period with Black Friday included in both periods, group revenue actually increased by 1.3%. E-commerce now accounts for over 50% of retail revenue, and the number of active online customers has increased by 8% to 1.4 million.
Joules’ international operations have seen a significant increase in contribution to group revenue, rising to 17% from 15.8% in the previous year. Pre-tax profit for the first half of the year experienced a marginal decrease to £8.4 million from £9.3 million, while underlying pre-tax profit fell by £1 million to £9.7 million year-on-year. Group gross margin remained steady at 54.8%, but the retail gross margin improved by 50 basis points to 60.8% due to strategic promotions and currency hedging. However, net cash-in-hand fell by £2.2 million to £2.1 million, primarily due to capital expenditure and changes in tax payment timings at the head office.
The Christmas period posed challenges for Joules, with disappointing sales due to issues with online stock availability and non-recurring costs related to supply chain initiatives and China-US tariffs. These factors have impacted the brand’s full-year profit expectations, with retail sales falling by 4.5% year-on-year for the seven weeks leading up to January 5. However, CEO Nick Jones, who took on the role in September, maintains a positive outlook on the company’s overall performance. Jones credits the success to the appeal of the Joules brand, the growing customer base, and the flexibility of the company’s ‘Total Retail’ model.
During the first half of the year, Joules made investments in infrastructure and enhanced the customer proposition in order to support long-term sustainable growth. This included the implementation of a new point of sale system in stores, aimed at improving profitability and flexibility. The company also made progress in the development of its new Head Office, and launched the ‘Friends of Joules’ marketplace. Despite the challenges in the retail industry, Joules remains confident in its brand and is committed to navigating these challenges through strategic investments and customer-centric approaches.
– Joules Official Website (target=”_blank”)
– Retail Gazette – Joules Optimistic Despite Christmas Dip (target=”_blank”)