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July 19, 2022

Joules optimistic on FY as cost cuts appear to be bearing fruit

British lifestyle group Joules expects full-year pre-tax profits to be ahead of market expectations on the back of additional cost reductions.

By Beth Wright

In a trading update this morning (19 July) following the completion of its FY22 financial year ended 29 May, Joules says trading during the final weeks was consistent with the trends outlined in the group’s 4 May filing.

Nevertheless, due to additional cost reductions, Joules says it anticipates FY22 adjusted profit before tax and adjusting items to be slightly ahead of current market expectations.

The group adds trading trends outlined in its previous update have also continued for the first six weeks of FY23 with retail sales growth of 8.5% year on year. Gross margins have also remained under significant pressure with consumer appetite weighted towards mark downs amidst a heavily promotional environment, Joules notes.

The company adds it is making good progress on its plans to improve profitability by simplifying the business and optimising the cost base. This includes implementing previously disclosed plans to reduce global wholesale accounts to focus on long-term profitable partnerships, shorten product lead times, and diversify the group’s ethically sourced supplier base.

Joules intends to release its full-year results for FY22 in September.

Last week, the group confirmed its appointment of KPMG debt advisory to assist with boosting profitability and cash generation.

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