21st Jan 2020 09:18
(Alliance News) - Joules Group PLC on Tuesday reported a first-half earnings fall, with profit tumbling on biting impairment costs and revenue slipping due to a later Black Friday.
In the 26 weeks to November 24, revenue fell 1.3% year-on-year to GBP111.6 million from GBP113.1 million. In the 27 weeks to December 3, therefore including Black Friday, Joules said retail revenue rose 3.1% from last year.
Black Friday occurred on November 29 in 2019. The sales event follows the US's Thanksgiving Day holiday, which in 2019 came later than normal.
Interim pretax profit slumped by 82% to GBP1.7 million from GBP9.3 million a year before. Joules attributed this to GBP6.7 million worth of impairment costs related to store closures or relocations, a move to a new head office and a distribution centre renovation.
On an underlying basis, pretax profit was 9.3% lower year-on-year at GBP9.7 million from GBP10.7 million.
Joules boosted its first-half dividend by 2.7% to 0.77 pence per share from 0.75p.
Chief Executive Nick Jones said: "Joules delivered a robust first half sales and margin performance in line with expectations, which was pleasing in the context of a challenging consumer environment and widespread discounting by other clothing brands and retailers. This performance reflects the appeal of the Joules brand, our growing customer base and the flexibility of our 'Total Retail' model."
The more promising first-half results come about two weeks after Joules reported a challenging Christmas trading period.
An "internally generated stock availability issue" caused "disappointing" online sales over the seven weeks to January 5, Joules said. Total retail sales were down 4.5% year-on-year during the period. To compare, they rose 12% annually a year before.
Jones said on Tuesday however: "Since the period end, we have updated on our disappointing Christmas trading performance, resulting from a stock availability issue impacting our online channel. We identified the root cause, have taken steps to rebalance the allocation of stocks between channels for Spring-Summer 2020 and are strengthening our underlying processes."
The bleak seven-week period came after Black Friday, for which Joules said performance was in line with expectations.
Joules shares were 3.4% higher at 189.25p each in London on Tuesday morning.
By Eric Cunha; [email protected]
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