Joules, the fashion-to-lifestyle group, has reported a rise in revenues for the first half of its financial year, despite facing supply chain issues that have impacted profits. The company remains optimistic about the future, as it revealed a 35% increase in revenue compared to the same period last year, reaching £128 million. This growth was partly driven by the acquisition of Garden Trading in February.

When excluding the acquisition, sales were up 24% compared to last year and 5% compared to two years ago before the pandemic. Although the figures show progress, Joules is aware that it has not fully returned to normal trading conditions. Retail sales increased by 32% compared to last year and 25% compared to two years ago, totaling £100 million. Sales through its own stores grew by 80% compared to last year but experienced a 3% decrease from two years ago, amounting to £35 million. E-commerce sales saw a 14% increase from last year and a significant 54% surge compared to the pre-pandemic period. Revenue from shows, such as country shows, increased by 100% compared to last year but declined by 40% compared to the first half of 2019. Wholesale revenue stood at £25 million, marking a 47% increase from last year but a 19% decrease from two years ago.

Despite the challenges faced, Joules noted that customer demand for its products remained strong, with active customers growing to 1.9 million. Although store sales were below the 2019 level, this was due to overall lower footfall in retail destinations. The 3% decline in store sales from two years ago was actually seen as a positive outcome. Additionally, the opening of five Centre Parcs holiday destination locations in the second half of the previous year significantly contributed to overall sales.

E-commerce continued to thrive for Joules, benefiting from the Garden Trading acquisition and strong partnerships with third-party e-commerce platforms. Gross platform demand across Joules’ websites increased by 2%, supported by the growth of the Friends of Joules marketplace.

However, the company faced supply chain challenges during the period, particularly affecting wholesale performance. Higher costs and stock delivery delays due to labor shortages at the third-party-operated distribution center were prominent issues, notably during the Black Friday period in November. Joules anticipates a stronger wholesale performance in the second half of the year, driven by delayed dispatches from the first half and a stronger order book for Spring/Summer 2022.

Looking ahead, Joules expects ongoing supply chain challenges in the second half of the year. The emergence of the Omicron coronavirus variant has also introduced consumer uncertainty that could impact performance. Nonetheless, with a strong stock position, improved productivity at the distribution center, and sustained customer demand, the company is confident in achieving continued revenue growth in the second half of the year.

It is important to note, however, that the profit expectation for the full year falls below market expectations. Group profit before tax and adjusting items is projected to be between £9 million and £12 million, whereas the previous year recorded £3.7 million. This projection does not consider any potential significant COVID-19 restrictions. Nonetheless, Joules remains confident in its ability to generate strong revenue growth in the future.

Useful links:
1. Joules Official Website
2. Garden Trading Official Website