Joules powers ahead on e-tail, womenswear strength and US growth

By

Sandra Halliday

Published
Jan 31, 2017

Fashion and lifestyle brand Joules added to a string of upbeat sales reports Tuesday with news that its underlying pre-tax profit rose almost 20% in the first half. And the company said sales have continued to soar in the second half so far.

The strong H1 performance was driven by its continued expansion across distribution channels and target markets with e-commerce particularly strong as sales through that channel rose over 30%.  

And it delivered growth across all product categories with a good performance in the core womenswear business. Outerwear, dresses and tops all proved particularly popular with its customers.  

Further development of its accessories, footwear and kidswear categories contributed to the upbeat growth story too.

The six-month period, which ended November 27, saw group revenue up 16.2% to £81.4m as both retail and wholesale channels delivered. There was that 30.3% e-tail rise, boosted by the September 2015 relaunch of its e-commerce platform that has led to higher conversion rates and increased mobile traffic.

But stores were buoyant too with an 11.2% rise, and product sold through other companies’ stores did well with wholesale revenue up 17.1% to £24.5m, “reflecting the growing appeal of the Joules brand in the UK and target international markets.”

The company has a thriving domestic wholesale business as well as rising wholesale turnover in its key target markets of the US and Germany. In fact. international revenue increased 39.3% during the period and now represents 10.6% of the group total.

In the US, the company further expanded its sell-through in major department stores with Dillards launching childrenswear for AW16/17 and Nordstrom increasing product range listings in response to good sales.

The German wholesale business performed “in line with expectations with good performance in the independent retailer segment.”

So what did all that mean for profits? Underlying Ebitda was up 19.6% to £10.9m with the Ebitda margin increasing 40 basis points to 13.4%, and underlying pre-tax profit rose 19.9% to £7.5m. Shareholders will certainly be happy as underlying basic earnings per share went from 5.7p a year ago to 6.8p this time and the all-important dividend for each share has gone from zero to 0.6p.

CEO Colin Porter said that the strong trading has continued in the second half to-date. This is no surprise given that the company has been carefully expanding its store base (it now has 107 in the UK and Ireland). And given that in H1 it continued to progress the development of accessories and a targeted kidswear offer, from baby through to toddler, younger and older girls and boys, it is reaching out to a much wider customer base. Its footwear offer also expanded with good growth from its leather Chelsea Boot range.

And there is plenty of potential for the future. Joules said that range extension through its licensed partners including toiletries, bedding and eyewear, continue to perform well, although they are still only a small contributor to the group.   

The company’s focus is on continuing to build, develop and explore licensing opportunities “which align to Joules' distinctive brand values.” And to support this it named a new Head of Licensing late last year.