Joules swings to annual loss due to Covid-19
By Michele Maatouk
Date: Thursday 06 Aug 2020
(Sharecast News) - Joules said on Thursday that it swung to an annual loss after its shops were forced to close in March due to the Covid-19 pandemic, but the fashion retailer hailed a better-than-expected performance from its now reopened stores.
In the 53 weeks to the end of May, the AIM-listed company swung to a pre-tax loss of £2m from a £12.9m profit the year before, with revenue down 12.5% to £190.8m, dented by the Covid outbreak and the previously-reported e-commerce stock availability issue over Christmas.
Joules estimated the revenue impact of the pandemic in the final quarter at around £31m.
Retail sales fell 8.3% to £145.9m, with store sales down 21.4% and e-commerce sales up 5%, driven by strong sales through its owned e-commerce channels. Wholesale sales were 25.3% lower at £42.7m, having slumped 75% in the final quarter as wholesale customers globally closed their operations in response to the pandemic.
Joules said that while revenue for the final two months of the year was materially lower compared to the same period a year ago, it was significantly ahead of management's coronavirus base forecast in March, driven by the UK e-commerce performance.
The retailer said its trading performance in the first nine weeks of FY21 has been ahead of management's expectations, with e-commerce demand up more than 70% compared to the same period a year ago.
All of its stores have now reopened, with overall performance ahead of expectations, it said, while wholesale has been in line with expectations.
Chief executive officer Nick Jones said: "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.
"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."
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