Shoe Zone has warned that profits will be significantly lower than expected following challenging trading conditions in June and July.
The retailer now expects adjusted profit before tax for the year ending 27 September 2025 to be approximately £2.5m – half its previous forecast of £5.0m.
Shoe Zone shares were down 20% at the time of writing on Wednesday.
The company blamed weakening consumer confidence following the Government’s October 2024 budget announcement, saying customers have reduced discretionary spending amid ongoing inflation, higher interest rates and increased savings rates, resulting in lower footfall and reduced revenue.
Shoe Zone has also withdrawn its current dividend policy in light of the disappointing performance.
In addition to the external factors impacting sales, it’s clear that the Shoe Zone brand is becoming tired, which they have recognised with a wave of store refits.
The retailer opened its 200th new format store this month and remains debt-free with cash levels higher than the same period last year.
The group will likely have to spend some of this cash on revitalising its market positioning.