Joules profit impacted by supply chain issues
Fashion lifestyle brand Joules has said its full year pre-tax profit is likely to be down on the previous year after it was impacted by supply chain issues.
In a half year trading update for the 26 weeks to 28 November, the company said it experienced strong demand for its products in the period with group revenue rising by 35% to approximately £128 million. Joules attributed the growth to an increase in active customers to 1.9 million as well multichannel business model.
The company’s stores delivered a strong revenue performance, with sales up 80% against the prior year. Store revenue was just 3% behind the comparable pre-pandemic period two years ago despite lower high-street footfall.
Meanwhile, online sales rose by 14% year-on-year and by 54% on a two-year basis.
Nick Jones, chief executive 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.”
Joules said global supply chain issues resulted in some higher costs and stock delays during the period. In addition, labour shortages in its third-party operated distribution centre led to extended product delivery times, particularly in November.
Considering these factors, Joules now expects pre-tax profit before adjusting items for the period to be in the range of £2 million to £2.5 million compared to the £3.7 million achieved in the prior year. In addition, it expects full year profit to be below current market expectations and in the region of £9 million to £12 million if there are no significant Covid-119 restrictions.
Jones added: “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.”
