Joules records higher revenues but profits fall below expectations

Joules has published its interim Results for the 26 weeks ending 28 November 2021, recording a "disappointing profit outcome" but saw revenues increasing.

The group's profit before tax was £2.6 million, down £5.8 million compared to the pre-pandemic period of 2019 (£8.4m) and down £1.1 million compared to the same period in 2020 (£3.7m).

Overall group revenue however reached £127.9 million, up 15% compared to pre-pandemic results in 2019 (£111.6m) and up 35% against 2020 (£94.5). Joules said this "reflected its increasingly diversified lifestyle product offering."

In the 26 week period, Joules reported that store revenues almost reached pre-pandemic levels, hitting £35.5 million, an 80% increase compared to the same period in 2020 (£19.7 million). Joules added that 63% of total group retail sales were generated through digital channels, reflecting its growth in online presence in recent years.

Total e-commerce sales across the group’s websites and third-party e-commerce partners increased by 53% compared to 2019, and 14% against 2020. It also highlighted that 2020 was characterised by boosted e-commerce demand in light of COVID-related social restrictions and the enforced closure of stores for 10 weeks of the 26-week period.

It recorded a gross margin of 50.4%, a 4.4% decrease compared to the pre-pandemic margin results in 2019 (54.8%) and an increase of 0.2% compared to 2020 (50.2%). The company credited the slight improvement in margins to "an improved mix of full price sales and recovery of higher margin store revenue" but added that this had been "offset by significant increases to freight costs and outbound Brexit duties and taxes".

Nick Jones, CEO of Joules commented: “We have a clear plan of action to simplify the business, enhance efficiencies and mitigate the cost pressures that will enable the Group to convert the strong levels of customer demand into sustainable, profitable growth.

“Whilst we acknowledge that there are areas within the business where we need to simplify our operations and improve profitability, we remain very excited in our long-term growth prospects. We have continued to see improvements in brand awareness and customer numbers, and we are confident that our broadened lifestyle proposition - which benefits from increased product and category diversification through Friends of Joules and Garden Trading - is more relevant than ever to consumers.”