Joules sales and profits down but it beats its own expectations

By

Sandra Halliday

Published
Jan 28, 2021

Sales and profits fell at joules in the 26 weeks to the end of November, but the company’s pre-tax profit was still higher than it had expected. And it had plenty of good news to share in its results announcement on Thursday.

But first the bad news. Group revenue fell 15.3% to £94.5 million at the fashion-to-lifestyle retailer, while pre-tax profit before exceptional costs was £3.7 million, down from £8.4 million a year earlier. And statutory pre-tax profit edged down to £1.3 million from £1.7 million.

While those headline figures don’t look brilliant (and the firm's shares fell sharply in early trading on Thursday), they’re understandable in the context of enforced store closures for 10 out of the 26 weeks.

Retail store revenue was impacted not only by those closures, but also by lower footfall when the shops were allowed to open, with the result that store sales fell 46%. And wholesale revenue fell 44% to £17.1 million.

As a result of the challenges faced by international wholesale partners and despite strong growth through its international websites, total international sales in the period were down 29% against the prior year. That meant they represented 14% of group sales, compared to 17% a year ago.

Now for the good news. During the period, e-commerce revenue on its own websites grew by more than 45% and Gross Digital Platform sales (including Joules and 'Friends of Joules' marketplace sales) were up 55%. Total e-commerce sales rose 34% and it saw a 40% rise in customer traffic to its own website. 

Active customers also increased by nearly 160,000 over the last six months to almost reach 1.6 million, and ‘brand awareness’ rose 0.9% to record levels. In fact, it said it has total brand awareness of 46.5% and female brand awareness of 64.9%, which reflects “effective digital marketing investment, increased visibility of our community and charitable activities as well as a growing relevance of the brand to consumers' lifestyles”.

And despite the company’s stores having been closed again for much of the current half so far, e-commerce in the seven weeks to January 3 was “strong”, more than offsetting those closures, so that the firm’s own retail revenue is up 0.3% overall.

Importantly too, its net cash leapt to £15.6 million from £2.1 million in the half year.

CEO Nick Jones said he was pleased with the performance, with the firm’s progress continuing to reflect the strength of its flexible and digital-led model, growing customer base and strong brand.