Joules profits hit by higher costs
Lifestyle fashion retailer Joules saw its revenue increase by 35% to £127.9 million in the six months to 28 November after its brand awareness reached a new record.
Store revenue grew by more than 80% to £35.5 million as demand improved to almost pre-pandemic levels.
Meanwhile, online sales across the group’s websites and third-party ecommerce partners climbed by 14% against the prior period, and by 53% on a two-year basis. Joules said the uplift was driven by its recently acquired Garden Trading brand and a strong performance through the group’s digital partners.
However, operating expenses rose by 52.6% to £52.2 million after the retailer was impacted by the end of Government Covid support, increased wage costs in its distribution centre, higher digital marketing costs and the acquisition of Garden Trading.
Joules has posted a pre-tax profit before adjusting items of £2.6 million for the period compared to £3.7 million a year earlier.
Nick Jones, Joules chief executive, said: “Whilst the group experienced strong levels of customer demand that resulted in good revenue growth against the prior two comparative periods, Group profitability in the first half was impacted by various factors, most notably the severe inflationary cost environment. 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”
As previously announced, Joules said that it expects adjusted pre-tax profit for the full year to not be less than £5 million. This compares to £6.1 million in the previous year.
Looking ahead, Jones said: “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.”
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