(Alliance News) - Joules Group PLC said Friday its retail sales were significantly behind expectations because of "disappointing" online sales performance.
Joules shares were down 19% in London at 182.50 pence each on Friday, having opened at 160.00p. The stock was trading above 250p a year ago.
In a trading update for seven weeks to January 5, the seller of British countryside clothing said its retail sales were significantly behind expectations and decreased by 4.5%. In the same period a year ago, sales rose 11.7%.
The company said this was a result of disappointing online sales performance due to an internally generated stock availability issue throughout the important end of season sale event, which has now been addressed.
Joules said its other retail channels, including stores and third-party concessions, where it had "good stock availability", performed in line with expectations.
Joules also said it has taken strategic decisions in relation to its supply chain operations. The company has established an outsourcing outsourcing partnership with a leading logistics provider to operate and enhance its UK logistics operation and transitioned its UK distribution centre to a new partner. It didn't name either partner.
Joules said it expects second half cost headwinds as a result of US-China tariffs, which it expects to continue into next year.
As a result, Joules Group warned that underlying pretax profit will be "significantly below" market expectations for the financial year in May.
For the 12 months to May 26, 2019, Joules had posted pretax profit of GBP12.9 million, 15% higher year-on-year, with the underlying figure rising 19% to GBP15.5 million.
Nick Jones, chief executive officer, said: "We are disappointed with our inability to fully satisfy our customers' demand through our online channel during the important Christmas sale period. We have identified the root cause of this one-off issue and have taken steps to prevent its re occurrence."
"We remain focused on continuing to expand the Joules brand and are making significant enhancements to our supply chain operations in the UK and US to deliver both future capacity growth and efficiency," Jones said.
By Loreta Juodagalvyte; loretajuodagalvyte@alliancenews.com
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