21st Jan 2025 11:41
(Alliance News) - Shoe Zone PLC shares fell sharply on Tuesday as it said its full-year profit fell due to a "challenging" trading environment in the second half.
The Leicester, England-based footwear retailer said pretax profit in the 12 months to September 28 fell by 37% to GBP10.1 million from GBP16.2 million year-on-year.
Shoe Zone shares were down 10% to 90.00 pence in London on Tuesday morning.
Revenue also fell 2.6% to GBP161.3 million from GBP165.7 million in the previous year.
Shoe Zone ended the period trading out of 297 stores, down 8.0% from 323 after closing 53 stores and opening 27 new stores.
The company said pretax profit fell due to issues in the second half including unseasonal weather conditions, higher container prices, higher energy costs, and higher wage costs due to the national living wage increase.
It expects product margin levels to increase in the second half of the next financial year, as container prices start to stabilise.
"Our buying and shipping teams are doing an exceptional job of managing the direct from factory supply chain, which is still volatile, and we are confident we are performing better than the market average," the company said.
The company declared an interim dividend of 2.5 pence earlier in the year, which it said will be the final dividend for the year to allow for "prudent" cash management.
Shoe Zone paid a 17.4 pence per share dividend in financial year 2023.
Chair Charles Smith said: "Shoe Zone had a good year, essentially split into two halves. The first six months saw strong and consistent trading, followed by disappointing store sales, due to the weakening of consumer confidence and unseasonal weather conditions, particularly during peak summer.
"That said, the key back to school trading in the second half was positive, and ahead of the previous year, as were Digital sales, which had strong growth for the full period."
Digital revenues increased by 14% to GBP35.2 million from GBP30.9 million in 2023, due to an increase in conversion and from the introduction of free next day delivery.
The company cut its 2025 financial year profit outlook in December, to "not less than" GBP5.0 million from GBP10.0 million.
By Michael Hennessey, Alliance News reporter
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