Joules has been a perennial over-performer for some time, so did it manage to continue its strength in the 52 weeks up to May 26? Of course it did. On Thursday the company hailed the continued expansion of its brand and said that its full-year pre-tax profits should be at the upper end of analysts’ expectations.
That’s an impressive feat in itself given the historically weak backdrop that the retail sector, and particularly the fashion retail part of it, is seeing at present.
In a trading update ahead of its full-year results (due on July 23), the company said that group revenue in the latest year increased by 17.2% to £218 million. That happened as its “strong momentum through the first half of the year and the Christmas trading period continued into the second half.”
This growth, achieved against the backdrop of a challenging sector trading environment, “is testament to the strength of the Joules brand, the appeal of our products and the continued strong growth of our international business,” it said. In fact, international revenue now accounts for 16% of the group’s total, up from 13% a year earlier.
The company said that both retail and wholesale revenue figures in the period were impacted by the transition of some UK wholesale accounts to the retail concession model, a move that provides it with “greater future trading flexibility.”
Excluding those changes, comparable revenue growth would have been 13%. Total retail growth was 22.7% to £159.1 million, but would have been up only 10% without that wholesale-retail shift. Reported wholesale growth was 2.9% to £57.1 million, but would have been 22% without the shift, highlighting the strong appeal of the brand outside of its own store network.
Other revenue, which basically means licensing, surged almost 150%, although it started from a very low base and the total figure was only £1.8 million.
So why is it doing so well? Joules’ own view is that it “continued to benefit from its flexible and integrated ‘total retail’ model as well as a steadfast focus on delivering a seamless and enjoyable experience to customers, irrespective of how they choose to shop the brand.”
It also highlighted its strength in online retail with e-commerce revenue performing particularly well and now making up a massive half of total global retail revenue.
Its strength in wholesale was driven by strong growth in its target international markets, the US and Germany, as well as in the UK. International now represents around half of all wholesale turnover.
And what’s really important is that it appeared to make plenty of sales at full price as it described its gross margin performance as “robust”. That means it’s confident in analysts’ forecasts of between £14.8 million and £15.3 million in pre-tax profit.
CEO Colin Porter said of all this: “As Joules celebrates its 30th anniversary, this strong performance, particularly in our international markets and across our e-commerce and licensing channels, reflects the strength of our distinctive brand as well as the appeal of our products across an ever-increasing range of lifestyle categories.
“The group’s flexible and integrated ‘total retail’ model is well suited to meet rapidly evolving consumer shopping behaviours [so] we continue to look forward with confidence despite well-documented sector headwinds.”