Shoe Zone PLC on Wednesday reported a swing to a pretax loss in the first half of its financial year, as lower store numbers and subdued consumer confidence weighed on performance.
Shares in the Leicester-based footwear retailer fell 16% to 97.00 pence in London on Wednesday afternoon.
In the 26 weeks to March 29, the company posted a pretax loss of £2.3 million, swinging from a profit of £2.6 million a year earlier. Revenue declined 6.5% to £71.5 million from £76.5 million.
Store sales dropped 10% to £53.3 million, reflecting a reduction of 31 stores year-on-year, as the group continues its transition towards a more modern store estate. Shoe Zone ended the period with 278 locations and said it aims to stabilise its footprint at around 260 stores.
Digital sales, by contrast, rose 6.4% to £18.2 million, helped by new payment methods and a free next-day delivery offer.
It added that trading ‘continues to be difficult as consumer confidence continues to be low.’
No interim dividend was proposed, compared to 2.5 pence per share a year earlier.
Looking ahead, in December, the firm said it expects a full-year pretax profit of £5.0 million. Shoe Zone said it had previously predicted a pretax profit of £10.0 million for the full-year.
Shoe Zone reaffirmed its revised full-year pretax profit guidance of £5.0 million, down from its initial forecast of £10.0 million. The downgrade reflects weaker trading early in the year and higher costs related to national insurance and minimum wage increases following the October 2024 UK budget.
It reduced this forecast due to challenging trading conditions, especially in the first quarter of this financial year, attributed to ‘weak consumer confidence and unseasonable weather conditions.’
Looking ahead, the company said trading remains difficult but noted some improvement in the second quarter, aided by falling container prices and a stronger pound. It also plans further store refits and relocations before Christmas, part of its broader digital and physical upgrade strategy.
Chair Charles Smith said: ‘Shoe Zone delivered a satisfactory performance in the Period against the continuing backdrop of weak consumer confidence and macro/global economic volatility.’
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