Shoe Zone shares sank on Wednesday after the retailer issued a profit warning, slashing its profit forecast by 50% amid rising taxes and challenging trading conditions.
Taking aim after Labour’s disastrous budget, Shoe Zone said: “Consumer confidence has weakened further following the Government’s budget in October 2024, and as a result of this budget, the Company will also incur significant additional costs due to the increases in National Insurance and the National Living Wage.”
The footwear retailer now expects adjusted profit before tax to be no less than £5.0m for the year ending September 2025, down from previous expectations of £10.0m.
The company attributes this significant decline to multiple factors, including weakened consumer confidence following the October 2024 budget, unseasonal weather affecting sales, and increased operational costs from National Insurance and the National Living Wage rises.
These challenges have forced the retailer to plan store closures for locations that have become financially unviable.
In response to these pressures, Shoe Zone has also announced it will not pay a final dividend for the financial year ended September 2024. The company will provide more details in its annual results announcement scheduled for January 21, 2025.