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August 19, 2022

Joules sounds profit warning on dampened consumer confidence

Joules has announced an 8% slip in sales for the 11 weeks of the current financial year to date and has warned of a full-year pre-tax loss.

By Hannah Abdulla

In a bourse announcement, Joules said it had been plagued with softness in trading on the back of weak consumer sentiment and unseasonable weather which has affected full price sales of core categories such as outerwear, rainwear, knitwear and wellies.

Wholesale trading for the Joules brand has achieved 10% growth year-on-year despite delays experienced in US ports, however garden trading wholesale has continued to be significantly impacted by the wider slowdown in the home and garden market.

Retail margins in the year to date have declined by about six percentage points year-on-year. This reflects the shortfall of full price sales and the level of discounting that has been required to engage consumers in the highly promotions-driven retail landscape. While overall margins have been weak in the year to date, we expect partial recovery in the coming months as sales of full price Autumn/Winter collections become a more important part of the mix.

As a result of the recent softness in trading and the current weak consumer sentiment set out above, the Joules board expects a significant loss in the first half, followed by an improved performance in the second half as the benefits of business simplification begin to be realised. In light of this, the board currently expects the group to deliver a full year loss before tax, and before adjusting items, significantly below current market expectations.

Earlier this month, Joules confirmed clothing and homeware retailer Next Plc is considering a GBP15m (US$18.1m) stake in the business.

In its update, Joules said it continues to have “positive discussions with Next Group Plc about both adopting its Total Platform services to support its long-term growth plans and a potential equity investment.”

On Monday (15 August), Joules named former John Lewis executive Jonathon Brown as its new CEO to succeed Nick Jones who steps down from the role at the end of September.

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