Joules confirms lower profits after 'one-off' stock issue
The AIM-listed company, which sells British-inspired clothing and homeware products, reported a 1.4% revenue dip to £111.6m, for the 26 weeks ending 24 November 2019.
The company’s PBT before exceptional costs decreased by £0.9m to £8.4m and statutory PBT decreased to £1.7m, the statement detailed.
The company added that retail revenue was in line with the prior year at £79.9m, whilst the comparable 27-week period, including Black Friday in both periods, saw retail revenue increased by 3.1%.
In an earlier January trading statement, Joules had warned investors that annual profits would be ‘significantly’ lower than expected following an internal issue during ‘the important end’ of the season sale.
Shares in Joules Group were trading 6.23% higher at 194.41p on Tuesday morning.
The group described the 'disappointing' period as a “one-off” and said the root cause had been identified with subsequent steps taken to rebalance stocks for Spring/Summer offerings.
Nick Jones, CEO of Joules said he remained reassured by stock performance and online growth which he believes demonstrates “strong customer demand which continues to exist for the Joules brand.”
“I am confident in the opportunities for long-term sustainable growth of the Joules brand across multiple territories,” added Jones.
On 9 January, one day before Joules’ trading update, the British Retail Consortium reported that UK retail industry had suffered its worst year since comparable records began in 1995.
The trade association cited a total sales decrease of 0.1% in 2019 compared with 1.2% growth in 2018.
The statement also reiterated more cost headwinds as a result of US-China tariffs which it expects to continue into the new year.
Joules acknowledged the challenges facing the UK retail sector and said it was ‘well positioned’ to continue to deliver against its strategic growth objectives.
Broker Liberum Capital noted that this year’s results would have seen sales rise by 1.3% if the Black Friday period were included in H1 2020.
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