Joules profits up as ‘Total Retail’ plan takes shape

Joules has posted underlying profit before tax of £15.5 million, an increase of 19.4%, for its full-year financial results ending 26 May 2019.

Its 125-strong store estate is delivering remarkable results for the retailer, as it revealed group revenue up 17.2% to £218 million, while international expansion also soared 43%, with sales primarily in the US and Germany now representing 16.1% of group revenue.

“Joules has delivered another strong performance this year with growth across channels and product categories, both in the UK and internationally. These results in a challenging retail sector reflect the strength and appeal of the Joules brand, the flexibility of our ‘Total Retail’ model, and the success of our carefully managed product extension strategy,” said Colin Porter, Joules CEO.

“We are pleased with the group’s performance to date in the early stages of our new financial year, with trading in line with our expectations. Looking ahead, whilst the consumer retail environment is anticipated to remain challenging, particularly in the UK, the board and I believe that Joules remains well-positioned for continued success both in the UK and our target international markets.”

eCommerce now represents 50% of Joules sales, with the retailer saying its eCommerce and store propositions are  “converging” and this is becoming central to its continued growth strategy.

“In what is set to remain a highly dynamic, competitive and increasingly digital-led retail environment, we believe the flexibility of our ‘Total Retail’ approach will remain critical to Joules’ future growth and success,” Porter acknowledged in the results.

Over the last year, Joules also launched a new customer data platform which will enable it to target relevant customers to improve engagement and retention. At the end of the financial year it cited 1.5 million active customers, with around 700,000 new shoppers acquired during the period. Joules said these shoppers are purchasing more frequently and spending more money.

The retailer also noted that 20% of store transactions now directly support a digital sale, be that click & collect or order-in-store. Over the last year, online delivered £78.7 million in sales, while store sales accounted for 74.9 million. Wholesale, meanwhile, stood at £57.1 million.

In other technology developments, Joules migrated to a cloud-based eCommerce platform during the last year, which is said has increased site performance and reduced downtime. It also upgraded its payment service provider and enhanced the transactional abilities on its website. It was also the first full year of operating its new group-wide ERP system, Microsoft Dynamics AX, which was introduced to help international growth. This coming year, the retailer will implement a new integrated point-of-sale platform to its store estate, which will enable more integration between the online and in-store experience.

Last month, Essential Retail reported Joules CFO, Marc Dench’s thoughts on the digital KPIs behind new store openings. He said stores are now opened as much for their potential to serve click & collect customers and boost eCommerce sales, as their ability to drive traffic and revenue from the physical space alone.

“Rather than just financials, we look at how many new customers we think we can acquire and capture data on for the first time in that location, what level of click & collect we’ll be able to do in that location, and also eCommerce returns.”