Joules’ share price plummets after latest profit warning

Shares in Market Harborough-based lifestyle brand Joules plunged by more than 30% after the firm issued a profit warning on Friday morning (19 August).

On Friday, the retailer said it was expecting to post a significant loss despite being in “positive” talks with Leicestershire counterpart Next over a potential equity investment deal.

Shares in the company, worth 43.95p at close of play on Thursday last week, plummeted to around 28p on Friday morning off the back of the announcement.

The price rose slightly to 28.5p by close of trading on Friday afternoon.

The Leicestershire firm earlier told the London Stock Exchange that trading had “softened materially” since its last update on 19 July, with the warm and dry summer impacting sales of outerwear, rainwear, knitwear and wellies.

The company said it had seen an 8% year-on-year reduction in its retail sales in the financial year to date and now expects to require a waiver of certain covenants on its debt facilities.

The news compounds a turbulent period for Joules, which previously saw its share price plummet in July after it emerged that it was bringing in KPMG to help boost its cash reserves.

Danni Hewson, financial analyst at AJ Bell, said: “Joules is best known for its posh wellies and very few people will have wanted to make such a purchase when the sun is shining. The very hot summer also means its raincoats and knitted jumpers are collecting dust on the shelves.

“Furthermore, its home and garden products have suffered because households spent so much money on such items during the height of the pandemic that people simply don’t need to upgrade what they already have in the back garden.

“This hit to earnings has come at a terrible time for Joules given it is already experiencing debt pressures.”