Bosses at Joules brace for ‘significant loss’ in pre-tax profit this year
Bosses at retailer Joules are bracing for a “significant loss” in profit in the first half of this year, as inflation and the recent heatwave hit sales.
While the company expects its finances to improve in the second half of the year, the board announced today, Joules is expected to report a pre-tax loss for the whole year.
It is a swift turnaround from last month, when the board expected its yearly profit to surpass expectations.
Shares in the retailer have plunge more than a third to 28.8p per share by mid-morning.
“The recent extremely warm and dry summer weather has adversely affected full price sales of core categories such as outerwear, rainwear, knitwear, and wellies and has compounded the ongoing subdued consumer demand due to the well-documented cost of living crisis,” Joules said in a statement.
Joules has attempted to lure in customers with discounting amid the shortfall of full price sales, as Brits spend less on non-essential items as a recession in the UK looms.
Retail sales have fallen eight per cent year-on-year in the five weeks to 14 August. Meanwhile, retail margins in the year to date have slipped by around six percentage points in comparison with last year.
Last month, Joules said discount-hungry consumers had intensified pressures on margins.
The clothing and lifestyle brand admitted gross margins had “remained under significant pressure” after “consumer appetite” was focused on marked down products.
Shoppers have been hunting for reductions amid monster hikes in energy and fuel bills, with Joules citing a “heavily promotional environment.”