Stock availability issues hamper Joules' Christmas sales
10 Jan 2020
Commenting on its Christmas trading performance, British lifestyle brand Joules said retail sales over the seven-week period were significantly behind expectations and decreased by 4.5 percent against the prior year as a result of disappointing online sales performance due to an internally generated stock availability issue. The company added that traffic to the group’s website grew by 8 percent, however conversion was significantly down due to the stock availability issue. The group’s other retail channels, including stores and third-party concessions, where the Group had good stock availability, performed in line with expectations.
“We are disappointed with our inability to fully satisfy our customers’ demand through our online channel during the important Christmas sale period. We have identified the root cause of this one-off issue and have taken steps to prevent its reoccurrence. We remain focussed on continuing to expand the Joules brand and are making significant enhancements to our supply chain operations in the UK and US to deliver both future capacity growth and efficiency,” said Nick Jones, the company’s Chief Executive Officer.
Joules expects to report full year underlying PBT below market estimates
The company further said that to support further growth of the brand, the group has establishing an outsourcing partnership with a leading logistics provider to operate and enhance the group’s UK logistics operation and also transitioning its US distribution centre to a new partner, which will incur incremental non-recurring costs during the transition phase but are expected to deliver significant cost benefits from the end of FY21 onwards. The group also expects second half cost headwinds as a result of US-China tariffs, which it expects to continue into next year.
Taking the above into account, the board anticipates that FY20 underlying PBT will be significantly below market expectations.