Sun not shining for welly seller Joules as heatwave hits sales

theguardian.com:

Shares in the struggling high street retailer Joules plunged by more than a third after it issued a profit warning blaming the summer heatwave for plunging sales of clothing such as jackets, knitwear and Wellington boots.

The company, whose share price has slumped by 90% over the last year, said that it is seeing consumers look for discount clothes “amidst a heavily promotional environment” as overall demand weakens due to the cost of living crisis.

In the five weeks to 14 August trading has “softened materially”. Sales are down 8% year-on-year in the 11 weeks of its current financial year to date.

Retail margins in the year to date have declined by around six percentage points year on year, as a result of the shortfall of full-price sales and the level of discounting required to engage customers.

Joules, which said it now expects full year losses to be “significantly below” market expectations, also said that it had begun “positive discussions” with its bank to waive debt covenants.

Its shares plunged 35% in early trading as investors reacted to the latest bad news.

“Just when you thought it couldn’t get any worse for retailer Joules, along comes another devastating profit warning,” said Danni Howson, financial analyst at AJ Bell. “Customers have typically preferred to buy its goods if prices are slashed, so its margins have taken a big hit.”

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The company said wholesale trading for the Joules brand achieved 10% growth year-on-year despite delays experienced at US ports, however its garden trading wholesale business has continued to be significantly affected by the wider slowdown in the home and