It was not supposed to be like this. Midas recommended colourful wellies and clothing retailer Joules in 2016, when the company had just joined AIM and the shares were £1.71.
By 2018, the stock had shot up to £3.02, with sales, profits and dividends all growing fast.
Today, Joules is trading at £1.40, hit by a brutal combination of stock mismanagement last Christmas and persistent lockdowns for the past nine months.
Christmas trading has held up well so far and brokers are looking for further improvements in the months ahead
The company fell into loss in the year to May, dividends were cancelled and no payout is forecast for this year either.
There have been tentative signs of recovery since then. Chief executive Nick Jones said last week that first-half sales have been better than expected, driven by online sales, which now account for more than 70 per cent of group revenues.
Christmas trading has held up well so far and brokers are looking for further improvements in the months ahead.
Midas verdict: Joules has been a huge disappointment for investors but now is not the time to sell. The company has traditionally been a lot more resilient than competitors and a focus on families, fun and the outdoors should stand it in good stead in the post-Covid world. Hold.
Traded on: AIM Ticker: JOUL Contact: joulesgroup.com or 01858 435 255
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