Joules upgrades full-year expectations

Retailer Joules upgraded its full-year expectations on Tuesday, citing strong online sales and a positive performance since the reopening of its stores last month.

The company now expects group revenue and pre-tax profit for FY21 to be ahead of current consensus expectations of £187m and £4.1m, respectively.

Joules said that since its interim results on 27 January, it has continued to deliver a positive performance across the retail channels that have been able to trade within the context of lockdown restrictions.

"This positive performance has been driven by continued strong sales on the group's digital platform, an encouraging initial contribution from the acquisition of Garden Trading in February, and the performance of the group's stores since their reopening from mid-April," it said.

The online segment has continued to deliver strong growth, with demand on Joules' own websites growing around 50% year-to-date against the comparable prior year period, up from 47% growth in the first half of the year.

Meanwhile, stores have performed ahead of management's expectations since re-opening after the third national lockdown, with sales for the four weeks since reopening ahead of the comparable period two years ago. "This pleasing performance reflects a combination of pent-up consumer demand as well as the attractive, predominantly lifestyle locations of the group's store estate," it said.

Garden Trading has performed ahead of expectations over the first three months since the acquisition, with sales up 85% against the comparable prior year period.

Chief executive officer Nick Jones said: "Our digital proposition continues to go from strength to strength and we have been very pleased with the performance of our retail stores since their re-opening. T

"Although the past 12 months have been incredibly challenging for the retail sector, I truly believe that Joules is now in an even stronger position than ever before. We have an increasingly digital-led business, more diversified income streams and a broader product proposition that is highly relevant to our customers' lifestyles."

At 1000 BST, the shares were up 5% at 271.95p.

House broker Liberum, which rates the stock at ‘buy’, lifted its price target to 400p from 300p after the update. "Joules continues to embed its omni-channel model, diversify and grow its revenue streams and evolve into a true lifestyle brand," said analyst Wayne Brown.

The broker upgraded its underlying profit before tax estimate for FY21 by 41.8% to £5.2m. It now assumes group sales of £194m, representing a 2% uplift versus its previous estimate of £190m.