Joules defies high street gloom to top profit forecast

Positive news from the high street
Positive news from the high street

Joules has defied the gloom on the high street, beating analysts’ expectations for annual profit growth.

The retailer said on Thursday 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% year-on-year to £185m, with retail sales up 15.9% and wholesale sales up 24%.

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% in morning trading to 340p, with analysts saying the stock could target 420p.

“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,” said CEO Colin Porter.

“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 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.”