Joules shares tumbled 35.1% to 28.5p in early morning trading on Friday after the fashion group announced notably softened trading, with a “significant loss” expected in HY1 2022.
Warm weather impacted the retailer’s core categories, including demand for outerwear, rainwear, knitwear and wellies, alongside the loss of customer demand linked to the cost of living crisis.
Joules reported an 8% year-on-year drop in retail sales across the last 11 weeks.
The company highlighted a 10% growth in wholesale trading across FY 2022, despite US port delays.
However, Joules confirmed its gardening segment suffered lower trading due to the wider slowdown in the home and garden market.
Meanwhile, retail margins in the year-to-date slid 6% on the back of fewer full-price items on sale as the company utilised discount items to engage higher customer levels.
Joules said it expected partial recovery in the coming months as full-price autumn and winter clothing sales enter the trading landscape.
The fashion group reported an anticipated FY 2022 pre-tax loss “significantly below” current market expectations.
Next potential stake
Joules added it was still in discussions with FTSE 100 fashion giant Next concerning the adoption of its Total Platform services to support its long-term growth plans and a potential equity investment.
The firm caveated that there was “no certainty that these discussions will lead to any agreement.”
Joules said it would release further information on the possible partnership if and when available.