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Joules expects profit to meet top end of market forecasts

Published: 09:22 06 Jun 2019 BST

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Joules shares rose more than 5% in morning trading

Joules Group PLC (LON:JOUL) shares strutted higher as the fashion retailer said it expects underlying pre-tax profit for the year to reach the top end of market forecasts.

In a trading update for the year to May 26, the lifestyle brand said revenue growth and tight cost control mean it predicts underlying pre-tax profit would be at the upper end of analysts’ estimates of £14.8mln to £15.3mln, compared to £13.0mln last year.

READ: Joules appoints former Asda commercial director as new CEO

Revenue jumped 17.2% to £218mln with retail sales up 22.7% to £159.1mln, wholesale sales up 2.9% to £57.1mln and licensing sales up 147.3% to £1.8mln.

Excluding the impact of the move to transfer some UK wholesale to retail concessions, total revenue grew 13%.

Wholesale revenue growth was led by a strong performance in its international markets, including the US and Germany while retail revenue was driven by online sales.

Licensing revenue was supported by existing and new licensing partnerships.

Strong margins 

Joules said the robust margin performance it reported in the first half was maintained throughout the rest of the year.

“The group's flexible and integrated 'total retail' model is well suited to meet rapidly evolving consumer shopping behaviours,” said chief executive Colin Porter.

 “Supported by this strong momentum and our outstanding brand, growing customer base and skilled colleagues across the world, we continue to look forward with confidence despite well-documented sector headwinds."

Joules shares rose 5.8% to 270p in morning trading. 

Joules results beat Peel Hunt forecasts

Analsyst at City broker Peel Hunt maintained a 'buy' rating and 400p target price on Joules' shares, saying the results were marginally ahead of their forecasts.

"Once again, the lifestyle brand has generated a strong performance across all channels, as the group’s flexible ‘total retail’ model has delivered, with online and international sales a particular highlight," they added. 

"Joules continues to offer one of the strongest profit growth rates in the retail and consumer space, with significant international potential."

 

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