Joules sales increase even though supply chain issues impact profit

Joules has announced its pre-close trading update for the 26 weeks ending 28 November 2021, revealing a 35% increase in group revenue to £128 million compared to the same period last year.

Store sales were up by 80% against the prior year and down 3% compared to the year before that.

Ecommerce sales rose by 14% year on year, in comparison to 54% the year before.

According to Joules its ecommerce performance benefitted from its acquisition of home and garden retailer Garden Trading and the overall performance of its third-party ecommerce partners.

Wholesale revenue, excluding Garden Trading, increased by 16% year-on-year. However, Joules acknowledged that ongoing supply change challenges resulted in higher costs and stock delays. This means that the brand saw a 35% decrease in wholesale revenue since H1 2020.

Labour shortages in its third-party operated distribution centre also resulted in extended product delivery times to online customers, stores and wholesale partners. These factors were particularly impactful in November, including the Black Friday period, which saw the brand's online traffic fall below the group's expectation.

The report revealed that Joules expects global supply chain issues to continue during the second half of the its financial year and warned of an increase in consumer uncertainty due to the emergence of the Omicron COVID-19 variant.

Group profit before tax and adjusting items for the period is anticipated to be in the range of £2 million to £2.5 million.

Nick Jones, CEO of Joules, said: “Joules has achieved good revenue growth against the prior two comparative periods reflecting the strength of the group’s flexible model and despite a challenging external trading environment. Alongside the strong appeal of our core Joules brand, the group continues to benefit from its increased diversification through Friends of Joules and Garden Trading, both of which continue to give customers even more reasons to shop with us.

“While we have not been immune to certain industry-wide pressures including supply chain disruption and cost inflation, we remain focused on delivering the group’s long-term growth strategy. We have continued to invest in the business to support our plans and despite the high levels of near-term consumer uncertainty, we remain very confident in achieving the group’s exciting future potential.”