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Joules enjoys strong Black Friday but sales hit by wholesale changes

The clothing retailer presented two sets of results: the effective first half of the financial year and a comparative period to last year so to include Black Friday

Joules Group PLC - Joules Group shows Black Friday's true colours

Joules Group PLC (LON:JOUL) produced a rather confusing trading update, with the posh welly seller's own stores outperforming the sector and leading to a strong Black Friday, but led to brokers cutting their full-year profit forecasts.

Black Friday alone contributed up to 3% in the overall growth for the 'British countryside' clothing retailer as it presented two sets of results: the effective first half of the financial year, ending on 24 November, and an extended version to 3 December to include a comparison with Black Friday in both years.

READ: Joules defies retail malaise as 'British countryside' brand enjoys strong UK and international growth

In the six months to 24 November, the AIM-listed firm posted flat retail revenues at £79.9mln, a 5.1% fall to £30.8mln in wholesale revenues and a 6.3% rise to £0.9mln in other income such as licencing and central costs – for a group revenue of £111.6mln, down 1.4%.

By extending the period include the Black Friday weekend, retail came out 3.1% higher than last year, while wholesale shrank 3.8%.

Wholesale revenues were hit by last year's deliberate switch of two major accounts, Next Label and John Lewis, from wholesale to retail concession models to provide more "control over brand execution, product assortment and trading flexibility", so now the division is mostly made up by independents.

House broker Liberum reduced its full-year pre-tax profit forecast by 5% to £16mln to take a “prudent” approach even though the company is outperforming the sector.

“There are many H2 levers that could prove our stance to be prudent, but given market conditions, the election and consumer uncertainty it seems appropriate at this stage,” analysts said in a note.

Analysts at Peel Hunt, meanwhile, cut their full-year sales assumptions by £10mln to c£230mln because of the lower run rate in sales from third-party channels and UK wholesale, but left PBT expectations unchanged "thanks to stronger retail margins, new store openings and tight cost control".

Quick facts: Joules Group PLC

Price: 204 GBX

Market: AIM
Market Cap: £1.83 m

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