Joules Group plc

('Joules', the 'Company' or the 'Group')

Pre-close Trading Update

Joules, the British lifestyle group, provides a Pre-Close Trading Update in respect of the 26-week period ended 28 November 2021 (the first half of the Group's financial year ending 29 May 2022, or the "Period"). The Group is providing its trading performance on both a year-on-year and two-year comparative basis, as FY21 H1 was characterised by boosted e-commerce demand reflecting Covid-19-related social restrictions and the enforced closure of stores (both Joules and its wholesale partners) for approximately two months.

Customer demand for the Group's products remained strong during the Period resulting in Group revenue increasing by 35% (+24% excluding Garden Trading) to approximately £128m (FY21: £95m). This performance reflects continued growth in active customers to 1.9m alongside the strength of the Group's flexible model which offers customers multiple channels to engage with and shop the Joules brand.

Joules' stores delivered a strong revenue performance, up 80% against the prior year. Store revenue was just 3% behind the comparable pre-pandemic period two years ago despite lower high-street footfall. This performance reflects the attractive locations of the Joules store estate as well as the opening during the second half of FY21 of five Centre Parcs locations, which have performed particularly well.

E-commerce grew 14% and 54% on a two-year basis. This performance benefitted from the acquisition of Garden Trading and the performance of our third-party e-commerce partners. Gross platform demand¹ across Joules' websites increased by 2% against a transformational prior year supported by continued growth within the Friends of Joules marketplace.

Garden Trading revenues increased 4% year-on-year and 77% on a two-year basis despite global supply chain disruption which highlights the continued strength of Garden Trading's home, garden and outdoor product offering.

Wholesale revenue, excluding Garden Trading, increased 16% year-on-year reflecting the reopening of the Group's wholesale partners in the UK and internationally. However, revenue remained significantly down on a two-year basis, in part due to the supply chain challenges discussed below. The Board anticipates a strong H2 wholesale performance benefitting from despatches delayed from H1 as well as a stronger orderbook for Spring/Summer 22.

The well-documented global supply chain issues have resulted in some higher costs and stock delays during the Period. In addition, labour shortages in our third-party operated distribution centre (DC) have resulted in extended product delivery times to online customers, stores and wholesale partners. These factors were particularly acute in November, including the Black Friday period, which alongside weaker year on year online traffic contributed to performance during this month being below expectations.

Considering these factors, Group profit before tax and adjusting items for the Period is anticipated to be in the range of £2.0m - £2.5m (FY21: £3.7m). Global supply chain challenges are expected to remain during at least the second half of the Group's financial year and there is increased consumer uncertainty as a result of the emergence of the Omicron coronavirus variant. Supported by a strong stock position and wholesale orderbook, actions that have been taken to improve productivity at the DC, and the ongoing strong customer demand for the Group's products, the Board is confident that the Group will achieve continued strong revenue growth in H2 and an improved profit performance. Nevertheless, full year profit before tax and adjusting items is now expected to be below current market expectations and in the region of £9m to £12m notwithstanding any further significant covid restrictions.

The Group anticipates providing its Interim Results on Tuesday 1^st February 2022.

Nick Jones, Chief Executive Officer of Joules, commented:

"Joules has achieved good revenue growth against the prior two comparative periods reflecting the strength of the Group's flexible model and despite a challenging external trading environment. Alongside the strong appeal of our core Joules brand, the Group continues to benefit from its increased diversification through Friends of Joules and Garden Trading, both of which continue to give customers even more reasons to shop with us.

"While we have not been immune to certain industry-wide pressures including supply chain disruption and cost inflation, we remain focused on delivering the Group's long-term growth strategy. We have continued to invest in the business to support our plans and, despite the high levels of near-term consumer uncertainty, we remain very confident in achieving the Group's exciting future potential."

¹Gross sales, including Joules own e-commerce and Friends of Joules, prior to returns, calculated consistently in each period

Enquiries:

This announcement contains inside information within the meaning of the Market Abuse Regulation. The person responsible for arranging release of this announcement on behalf of Joules is Caroline York, Chief Financial Officer.

Joules - a premium lifestyle group with an authentic British heritage 

Joules is a premium lifestyle brand and group with an authentic heritage and values of family, fun and joy in the countryside.   

Joules creates and curates exceptional products that brighten the lives of its customers, delivered through leading digital platforms and supported by enticing experiences and stores that are located in desirable locations relevant to the Joules customer's lifestyle.  

The Joules story began in 1989, when Tom Joule started selling clothing on a stand at a country show in Leicestershire. Today, the business designs and sells Joules branded clothing, footwear and accessories for women, men and children as well as collections of homeware, toiletries, lifestyle and pet product ranges that are carefully designed and developed through selected licensing partnerships. Each collection comprises Joules' distinctive use of humour, colour and unique prints, each of which is hand-drawn by the brand's talented in-house print design team at its headquarters in Market Harborough, Leicestershire. 

In 2021, Joules acquired leading digital home and garden retailer The Garden Trading Company, strengthening its position in the important and fast-growing home, garden & outdoor category. Similarly inspired by the British countryside, Garden Trading designs and sells distinctive products through its own e-commerce platform and wholesale partnerships with more than 1,000 stockists across the UK.  

Joules' distinctive design-led products are complemented by an increasingly broad customer offer provided through its digital marketplace Friends of Joules that enables third party brands to offer curated, complementary products to the Joules customer base, enhancing Joules' digital platform with thousands of products from hundreds of creative businesses to give customers everything they could ever need for a contemporary country lifestyle. 

The Joules group caters to its 1.9 million active customers through its own digital platforms, its retail stores in the UK and at country shows and events. Joules extends its brand reach through well-established third-party relationships - concessions, online marketplaces and traditional wholesale - in the UK and internationally. 

Internationally, the brand has made good progress in its target markets of the US and Germany, where the distinctive Joules brand and products range resonate well with local customers. International markets are served by wholesale partnerships and dedicated Joules websites. 

www.joules.com

www.gardentrading.co.uk 

www.joulesgroup.com