The LIFESTYLE brand Joules has defied the gloom on the UK high street by delivering a trading update that beat analysts’ expectations.
The retailer said that its profits for the year ended 27 May 2018 would be “marginally ahead” of the forecast £12.6 million. Group revenues were up 18.4 per cent year-on-year to £185 million, with retail sales up 15.9 per cent and wholesale sales up 24 per cent.
Colin Porter, Joules’ chief executive, also highlighted the strength of the company’s performance in Yorkshire, at a time when many big retail names are struggling.
Joules’ margins also improved over the year, due to fewer promotions in its shops and better margins in its wholesale business abroad.
The group’s share price was up by more than 3 per cent in morning trading to 340p, with analysts saying the stock could target 420p.
Mr Porter said: “This performance is testament to the strength and appeal of the Joules brand and our distinctive products which continue to resonate with our growing and highly engaged customer base.
“We have made excellent progress against our strategy of further developing the brand in the UK and target international markets and we remain confident of continued growth and expansion of the Joules brand.”
Liberum analysts said Joules’ recent share price weakness (the stock is down by about 14 per cent since the beginning of May) was “unwarranted” but represented a buying opportunity.
They said the business was one of the few in the retail sector that could be relied upon to deliver double-digital sales growth, whilst also improving margins.
“Today’s update shows that not all areas of the consumer landscape are struggling,” the analysts said.
“There are some material share shifts taking place and we see Joules as a beneficiary.
“Joules has a strong brand, heritage, low fashion risk and wide appeal. It is gaining share in the fast-growing premium lifestyle sector where growth levers exist including stores, online, wholesale and international.”
Joules has stores and stockists across Yorkshire, including outlets in Ilkley, Meadowhall, Beverley and York.
The group will announce its preliminary results for the 52-weeks to May 27 2018 on Wednesday July 25 2018.
The company was established by Tom Joule in Market Harborough in 1989. Mr Joule spotted an opportunity to sell practical yet stylish high-quality products which reflect the personalities of those who love the outdoors.
Mr Porter took the reins as chief executive in September 2015, with Mr Joule focusing on the creative side of the business.
Mr Porter told The Yorkshire Post that the business was a distinctive brand with a unique, family-focus.
He said Yorkshire was a “very good” area for Joules, which was reflected in the decision to relocate its Harrogate operation to a larger store.
He added: “We have got a very fast growing international part of our business as well.”