Joules cites Black Friday timing and online stock issues for revenue decrease

Lifestyle retailer Joules has today reported a 1.4% drop in group revenue to £111.6m for the 26 weeks ending 24 November 2019.

Underlying profit before tax also fell for the retailer, down £1m to £9.7m during the period.

The retailer said that results were impacted by the timing of the Black Friday trading period, which fell in H2 in FY20, but in H1 in the previous year.

On a comparable 27-week period, including Black Friday in both periods, group revenue increased by 1.3% and retail revenue increased by 3.1%.

As announced on 10 January, online stock availability issues were cited for a disappointing Christmas trading period, along with non-recurring costs associated with supply chain initiatives and China-US tariffs which have impacted full year profit expectations.

Joules CEO, Nick Jones, commented: “Since the period end, we have updated on our disappointing Christmas trading performance, resulting form a stock availability issue impacting on our online channel. We identified the root cause, have taken steps to rebalance the allocation of stocks between channels for SS20 and are strengthening our underlying process.

“I am reassured by the performance we saw in the retail channels where we had good stock availability and our continued online growth, evidencing the strong consumer demand which continues to exist for the Joules brand.”

E-commerce now represents over 50% of Joules’ retail revenue, and international sales account for 17% of group revenue. Active customers also increased by 8% to 1.4m.

The figures also showed the group booked costs of £6.7 million for one-off items, including the potential closure of more than four under-performing stores and its new HQ in Market Harborough. It is moving to the new site this summer.

Despite the overhaul of its estate, Joules is also opening new stores, having added four since the end of the first half and with up to another 10 planned over the next 18 months.

Retail analysts at Liberum said: “The half-year out-turn is pretty much in line with expectations; however, this has been overshadowed by a more challenging Christmas period.

“We are of the view that this was a one-off instance and growth rates from here should return to higher, more typical levels.”

Joules – which was founded by Tom Joule in 1989 – has 124 stores across the UK and Ireland, as well as an online arm and wholesale business that supplies more than 2,000 stockists worldwide.