Shares in clothing, footwear and homeware brand Joules (JOUL:AIM) rallied 6.2% to a one-year high 275p after flagging a forecast-beating performance. The Leicestershire-based company said full year sales and earnings would be ahead of estimates thanks to strong sales on its digital platform.
Joules also pointed out a stronger than expected contribution from its high street stores since re-opening and an ‘encouraging’ performance at the recently-acquired Garden Trading unit.
This all means that sales and pre-tax profits are now expected to top consensus forecasts, which had been pitched at £187 million and £4.1 million respectively.
FROM STRENGTH TO STRENGTH
‘Our digital proposition continues to go from strength to strength and we have been very pleased with the performance of our retail stores since their re-opening,’ insisted CEO Nick Jones.
He believes Joules is now ‘in an even stronger position than ever before. We have an increasingly digital-led business, more diversified income streams and a broader product proposition that is highly relevant to our customers’ lifestyles.’
Since re-opening following the third national lockdown, Joules’ stores have performed ahead of management’s expectations with sales for the four weeks since re-opening ahead of the comparable period two years ago thanks to pent-up consumer demand and ‘the attractive, predominantly lifestyle locations of the group’s store estate’.
Furthermore, Friends of Joules, its digital marketplace of third party brands, is growing like topsy and home and garden products retailer Garden Trading has performed ahead of expectations over the first three months since the acquisition, with sales up 85% against the comparable prior year period.
THE LIBERUM VIEW
Following the positive update, Liberum Capital upgraded its underlying pre-tax profit forecasts for 2021 and 2022 by 41.8% to £5.2 million and 36% to £15.5 million respectively and hiked its price target from 300p to 400p.
‘Short-term we see Joules as particularly well-placed, given its family focus and lifestyle locations, when set against the staycation theme likely to play out over Spring/Summer 21,’ explained the broker.
‘Long-term we are encouraged by the group’s much strengthened position over the past few years, driven both through its much enhanced digital platform and capabilities, and its continued evolution into a true premium lifestyle brand, supported by both the strong growth in its Friends of Joules marketplace and the recent acquisition of Garden Trading.’