Shares in Joules Group PLC tumbled on Friday after warning its annual results will be worse than expected as recent hot weather in the UK hit sales of winter clothes.

Joules shares plummeted 36% to 28.30- pence each in London on Friday morning. So far in 2022, the stock is down 80%.

Record hot weather in the UK over recent weeks has hit sales of winter clothing, including ‘rainwear, knitwear, and wellies’. The unprecedented weather has ‘compounded the ongoing subdued consumer demand due to the well-documented cost of living crisis’, Joules warned.

Trading over the five weeks to August 14 has ‘softened materially,’ it cautioned.

Margins have taken a hit and Joules now expects a ‘significant loss’ in its first half. The Leicestershire, England-based country lifestyle retailer expects an improved second half, as it reaps the rewards of self-help work.

‘In light of this, the board currently expects the group to deliver a full year loss before tax, and before adjusting items, significantly below current market expectations,’ it said.

On a positive note, active customer numbers of over 2 million are up 10% on last year, Joules said.

The firm added that it has ‘sufficient liquidity to manage its working capital requirements including repayment of the extended facilities in November 2022.’ It expects to require a waiver of some covenants on its facilities and is ‘currently in positive discussions’ with its bank on this.

Earlier this week, Joules named Jonathon Brown as its new chief executive officer, effective from September 30. Brown will initially join the company as chief executive officer designate on September 7 and then take up the role at the end of the month. Most recently, he was the CEO of Compare the Market, which is part of financial services firm BGL Group, and has also held positions at retailers such as Kingfisher PLC and John Lewis.

The new appointment came after under-pressure Joules said it was in talks with Next PLC about adopting its Total Platform services. The move, if it goes ahead, will see Next inject about £15 million into Joules.

Joules said on Friday: ‘The group continues positive discussions with Next about both adopting its Total Platform services to support its long-term growth plans and a potential equity investment. There can be no certainty that these discussions will lead to any agreement, and further announcements in this regard will be made if and when appropriate.’

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