Joules sees full-year profit 'marginally' ahead of expectations

Fashion retailer Joules said on Thursday that full-year underlying pre-tax profit is likely to be marginally ahead of analyst expectations as strong momentum from the first half and Christmas period continued into the second half.

In a pre-close trading update for the year to 27 May 2018, the company said group revenue rose 18.4% on the year to £185.9m, or 18.8% at constant currency, reflecting "the appeal of the Joules brand, our distinctive product offering and growing customer base".

Retail revenue was up around 15.9%, driven by a very good e-commerce sales performance, as well as continued growth across the group's UK and Republic or Ireland store estate, which benefited from 15 net new stores during the year.

Meanwhile, wholesale revenue increased by around 24% on the prior year thanks to strong growth in the spring/summer order book from its UK and international wholesale customers.

Joules said it expects the group gross margin to be marginally ahead of the prior year as a result of maintaining promotional discipline within retail channels and an improved gross margin in international wholesale, where it has completed the migration of the US third-party distributor activity to an in-house model and seen a favourable product mix with an increased proportion of clothing sales.

Chief executive officer Colin 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. Our multichannel approach and 'buy now, wear now' product proposition has enabled the group to deliver a performance ahead of our initial expectations, despite the widely reported challenges in the sector.

"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."

At 1050 BST, the shares were up 3.3% to 340p.