Revenues slide at Joules as Covid-19 shuts stores

Joules Group reported a slide in sales on Thursday after the pandemic shut its stores for ten weeks during the first half.

Group revenue in the six months to 29 November came in at £94.5m, a 15.3% slide on the previous year, while operating profits fell to £3.7m from £8.4m.

Pre-tax profits were £400,000 lower at £1.3m, however, the figure was ahead of expectations.

The retailer said its stores had been closed for 10 of the 26 weeks, after lockdown restrictions shut non-essential shops. However, e-commerce revenue through its own websites rose by around 45%, with gross digital platform sales up 55%. Active customers rose by around 160,000 to nearly 1.6m.

Looking to the remainder of the year, Joules said that e-commerce sales in the seven weeks to 3 January had "more than offset" the impact of stores being closed over the key Christmas trading period, with own retail revenue ahead 0.3%.

However, it reiterated an earlier warning that while the current restrictions on non-essential retail remain uncertain, should the estate remain closed until 1 April, the potential loss in group revenues is estimated to be between £14m and £18m.

Chief executive Nick Jones said: "While the retail sector will continue to face near and medium-term challenges as a result of the pandemic, I remain confident that Joules - underpinned by the strength of our brand as well as the group’s flexible and scalable platform - remains well positioned to achieve its strategic objectives to growth as a leading lifestyle brand and digital marketplace."

The AIM-listed group also provided an update on Brexit. It said the UK’s departure from the European Union had resulted in higher duty charges as well as increased courier and administration costs. "The annual impact of these increased costs is estimated to be in the range of £0.8m to £1m, which is broadly in line with the board’s expectations," it said.

"The group will continue to evaluate and implement options to mitigate the adverse impact including a potential increase in selling prices and structural changes to the group’s logistics."

Wayne Brown, analyst at Liberum, said: "[The] interim results reflect strong underlying progress in digital in what has been a challenging first-half, and we keep our forecasts unchanged.

"The group’s resilience, growing brand strength and financial health mean we reiterate our ‘buy’."

As at 1100 GMT, shares in Joules were off 4% at 149.32p.

Joules also announced on Thursday that Marc Dench, chief financial officer, was leaving to take up a new role in a different sector, and that a search for his successor was underway.