Annual Results for the 53-week period ending 31 May 2020

Encouraging recent trading reflects the strength of the Joules brand with continued strong e-commerce demand during the UK lockdown

Business well positioned to navigate existing and potential COVID-19 challenges:

  • Trading performance ahead of management's expectations1 after the first nine weeks of FY21
    • E-commerce demand2 up more than 70% on the comparable period in prior year
    • All stores now re-opened with overall performance ahead of expectations
    • Wholesale performing in line with expectations
  • Strong financial position with net-cash of £5.4 million and liquidity headroom of £54 million at 2 August 2020, significantly ahead of management’s expectations1
  • Continued progress on strategic initiatives:
    • ‘Friends of Joules’ digital marketplace providing increased range and choice to Joules’ customers
    • UK and US distribution centre transformation initiatives complete, providing improved capacity, service levels and productivity
    • New store point of sale platform implemented, further integrating the store experience with our digital channels under our flexible ‘Total Retail’ model
  • Joules brand health3 and engagement scores at record highs with Joules ranked 12th out of 278 consumer brands in KPMG Nunwood’s 2020 Consumer Experience Excellence report

FY20 performance:

  • Group revenue decreased by 12.5% to £190.8 million (FY19: £218.0m) adversely impacted by COVID-19 and the previously reported e-commerce stock availability issue over the Christmas trading period
    • Revenue impact of COVID-19 in the final quarter is estimated at c.£31 million4
    • E-commerce performed well with Joules’ own e-commerce channel revenue up c.11% for the year
    • E-commerce represented nearly 57% of retail sales (FY19: 49.5%). For the first nine months, pre-COVID-19, it represented nearly 51% of retail sales
    • Store revenue declined 21.4% for the year. Over the first 9 months, pre-COVID-19, store sales declined c.8%, reflecting structural industry trends and reduced promotional activity
    • Wholesale revenue declined 25.3%, with the final quarter experiencing a reduction of c.75% as wholesale customers globally closed their operations in response to COVID-19
  • Loss before tax (pre-IFRS16 and exceptional items)5 of £2.0 million (FY19: £12.9m profit)
  • Statutory loss before tax of £25.3 million (FY19: £12.9m profit)
    • IFRS16 (Leases) net impact £(1.8) million (FY19: na)
    • Exceptional costs £(21.5) million (FY19: nil) including £21.0 million non-cash impairment charge
  • Group gross margin 50.7%, down 4.1%pts, impacted by sales channel mix and increased promotional activity in the final quarter
  • Basic earnings per share loss 22.07 pence (FY19: 11.6 pence)
  • 1.43 million active customers6 and record brand awareness and brand health3 metrics achieved during the final quarter of the year
  • Net cash7 of £4.5 million (FY19: £5.8m) and liquidity headroom of £53 million at 31 May 2020

Nick Jones, Chief Executive Officer of Joules, commented:

I am incredibly proud of how Joules has responded and adapted to the recent disruption caused by the COVID-19 pandemic, and I would like to again thank our colleagues for their hard work, our customers for their continued loyalty, and our partners for their collaboration throughout this challenging time.

We were quick to bolster our liquidity position, preserve cash and focus our trading online, and we are very encouraged by the more than 70% growth in e-commerce demand since the start of the new financial year as well as the performance of our stores since reopening. This is testament to the strength of the Joules brand, the relevance of our product range, the desirable locations of our stores and the flexibility of our model.

Whilst the Group’s financial results for FY20 were impacted by challenging external trading conditions in the UK throughout the year; the stock availability issue that, as previously reported, impacted our e-commerce sales over the Christmas trading period; as well as material COVID-19-related disruption during the final quarter, I am very pleased with the continued progress we have made against our long-term strategic goals. We have further strengthened our flexible ‘Total Retail’ model; enhanced our UK and US supply chain operations to support our growth plans; and launched Friends of Joules, an exciting new digital marketplace.

Whilst the retail sector will continue to face challenging trading conditions over the coming months, I believe that Joules is very well positioned to navigate both the existing and potential further COVID-19-related challenges and continue to invest in targeted growth opportunities. The Joules brand’s awareness and health metrics have never been stronger, and I firmly believe that, underpinned by our strong brand purpose, Joules is more relevant than ever before.”

Reconciliation to statutory profit/loss before tax:

£millionFY20FY19
PBT pre-IFRS16 and exceptional costs5(2.1)£12.9
IFRS16 (net PBT impact)(1,8)na
PBT - before exceptional costs(3.9)£12.9
Exceptional costs(21.5)-
Statutory (loss)/profit before tax(25.3)£12.9

1 Expectations is stated with reference to management's most recent forecast being the ‘base case’ used for the Directors’ assessment of going concern and as the basis for the Group’s FY21 financial year budget
2 Demand is a non-GAAP measure. It states the total sales value (inclusive of sales tax) of customer orders received in the relevant period, excluding any returns received or provision for potential returns
3 Brand Awareness and Brand Health are measured as part of an independent YouGov consumer survey
4 COVID-19 revenue impact is estimated based on management’s revenue forecast for the final quarter prepared just prior to the start of Q4 with consideration to sales run rates, prior year sales, wholesale order book and planned promotional activity
5 LBT/PBT - pre-IFRS16 and exceptional costs is a non-GAAP measure provided to facilitate comparison across periods, it is stated prior to the impact of IFRS16 (Leases) adopted for the first time in FY20, and prior to exceptional costs that are primarily related to non-cash asset impairments in the Period
6 Customer registered on our database who has transacted in the last 12 months.  Prior years restated to reflect improved database matching (FY19: 1.39 million active customers)
7 ‘Net cash’ represents gross cash & cash equivalents less total borrowings.  


Enquiries:

Joules Group plc
Nick Jones, CEO
Marc Dench, CFO
Tel: +44 (0) 1858 435 255

Hudson Sandler (Financial PR) 
Alex Brennan
Lucy Wollam
Tel: +44 (0) 20 7796 4133

Peel Hunt LLP, Nominated Advisor and Joint Broker 
George Sellar
Andrew Clark
Tel: +44 (0) 20 7418 8900

Liberum Capital Limited, Joint Broker 
John Fishley
Edward Thomas
Tel: +44 (0) 20 3100 2000

Joules - a premium lifestyle brand with an authentic British heritage

Established in Britain by Tom Joule three decades ago, Joules is a premium lifestyle brand with an authentic heritage.

The Joules story began in 1989, when Tom Joule started selling clothing on a stand at a country show in Leicestershire. Today, it is a true multi-channel lifestyle brand; its products are available through its e-commerce websites, retail stores, at rural shows and events and wholesale channels both in the UK and internationally.

Joules carefully designs and sells clothing, footwear and accessories for women, men and children. The business also sells ever-growing collections of homeware, eyewear and lifestyle product ranges through both its licensing partnerships and ‘Friends of Joules’, the brand’s online marketplace that brings together hundreds of creative businesses to give customers everything they could ever need for a contemporary country lifestyle.

The brand’s values of quality, Britishness, family and humour, coupled with its unique use of colour and print set Joules apart. This approach, along with an unwavering attention to detail and drive to surprise and delight its customers with unexpected details, has been central to the brand’s success and remains at the heart of everything Joules creates.

www.joules.com | www.joulesgroup.com

Joules Fast Facts

  • Joules is an international brand, available in the UK, USA, Germany and other international markets
  • Joules has a significant online business, operates across 128* stores in the UK and ROI across a range of location types and has a well-established wholesale business with over 2,000 stockists worldwide
  • Joules’ talented in-house print design team lovingly hand-draw all the prints and unexpected unique details you see within its collections each season
  • Joules is proud of its British heritage and still has strong roots in Market Harborough, the site of its first shop and head office – since day one
  • Joules’ performance has been recognised through a number of awards including:
    • Mainstream Brand of the Year – Drapers Awards 2019, 2017 and 2016
    • Best Licensed Fashion or Talent Brand Award – Brand & Lifestyle Licensing Awards 2019
    • Best Licensed Gifting Product Award – Brand & Lifestyle Licensing Award 2019
    • The Best Fashion Retailer (Mark of Excellence) – Retail Week Awards 2019 and 2018
    • Fashion Retail Business of the Year (between £101m-£500m turnover) - Drapers Awards 2018 and 2017

*As at 31 May 2020, excluding concessions and franchises (33 concessions and 3 franchise stores)