Premium fashion brand Joules (LON: JOUL) is increasing online sales and high street sales are recovering. The Christmas season will be key for the performance this year.
In the first 13 weeks of the new financial year, revenues fell 18% to £39.6m which is better than expected. All stores were reopened by August. Combined with online sales there was a 1.5% improvement in group retail sales.
Peel Hunt had expected a reduction in Joules retail sales, because of the performance of rival retailers.
However, wholesale sales more than halved. Customers already had stock and were not taking additional deliveries. Sales are starting to improve ahead of the new season.
Net cash is £8.5m, with stocks having been reduced, and there are plenty of spare borrowing facilities.
The Joules share price recovered 6.2p to 98p. Peel Hunt has maintained its 2020-21 pre-tax profit forecast at £5.4m, compared with a loss last year. The broker does say that the first quarter performance could have sparked a £500,000 upgrade but it remains cautious given the current uncertainty.
Joules shares are trading on 25 times prospective earnings, although that could fall to 16 next year.
The share price could have further to go if the current government restrictions do not hamper trading.