Dec 14, 2021
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Joules sales rise but supply chain woes hurt profits

Dec 14, 2021

Joules saw rising revenues in the first half of its financial year (the 26 weeks to 28 November), it said on Tuesday. But supply chain issues got in the way of a full recovery and it issued a profit warning, while also sounding generally confident about the future.


First the good news. The fashion-to-lifestyle group said revenue reached £128 million, which was up 35% compared to a year ago (when its stores had been closed for two months of the period) and up 15% compared to the pre-pandemic first half two years ago. 

Those figures were flattered slightly by the fact that the company acquired Garden Trading in February and without that acquisition on a more directly comparable basis, sales were up 24% on the year and 5% compared to two years ago.

Digging deeper into those figures, we can see how even though the recovery has set in, life and trading still aren't back to normal.

The company said that retail in general was up 32% on the year and 25% on two years ago at £100 million (or +25% and +18% excluding Garden Trading), while sales through its own stores were up 80% on the year but down 3% on a two-year basis at £35 million.

E-commerce was up 14% compared to a year ago and up a healthy 54% compared to the pre-pandemic period. With Garden Trading excluded, these figures were +5% and +41%.

Revenue made through shows (the company has always had a thriving business through events such as country shows) was up 100% compared to last year (when shows were all cancelled) at £2 million, but down 40% compared to the first half in 2019.

And wholesale revenue, at £25 million, was up 47% year-on-year but down 19% against two years ago. With Garden Trading excluded, the figures were +16% and -35%.

It said customer demand for its products “remained strong during the period”, a performance that reflects continued growth in active customers to 1.9 million.

While its stores remained below the 2019 figure, their sales have to be judged in the light of weaker footfall to retail destinations in general so a 3% fall compared to two years ago was actually quite good. The figure was helped by the opening during the second half of last year of five Centre Parcs holiday destination locations, “which have performed particularly well”.

E-commerce continued to prosper, boosted by the Garden Trading buy “and the performance of our third-party e-commerce partners”. Gross platform demand across Joules' websites increased by 2% “against a transformational prior year supported by continued growth within the Friends of Joules marketplace”.


The company said that while wholesale was up on the year, its two-year fall was due in part to those aforementioned supply chain challenges. But it “anticipates a strong H2 wholesale performance benefiting from despatches delayed from H1 as well as a stronger order book for Spring/Summer 22”.

The supply chain problems resulted in some higher costs and stock delays during the period. In addition, labour shortages in its third-party-operated distribution centre (DC) resulted in extended product delivery times to online customers, stores and wholesale partners. These factors were “particularly acute in November, including the Black Friday period, which alongside weaker year-on-year online traffic contributed to performance during this month being below expectations”.

So what does that all mean for the firm’s profit expectations? Group profit before tax and adjusting items for the period is anticipated to be in the range of £2 million to £2.5 million (down from £3.7 million a year earlier). 

And those global supply chain challenges are expected to remain “during at least the second half”, while “increased consumer uncertainty as a result of the emergence of the Omicron coronavirus variant” could also be an issue. 

Profit should improve in H2, but full-year profit before tax and adjusting items is expected to miss current market expectations at only £9 million to £12 million, “notwithstanding any further significant covid restrictions”.

But it said that “supported by a strong stock position and wholesale order book, actions that have been taken to improve productivity at the DC, and the ongoing strong customer demand for the group's products, the board is confident that the group will achieve continued strong revenue growth in H2”.

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