Shoe Zone has lowered its profit forecast after it said weaker demand for its products plus the soaring cost of shipping had compounded an already challenging trading environment.
The London-listed retailer said it now expects its adjusted profit before tax for the year ending October 2, 2024, to be “not less than £10m” – £5m lower than previously anticipated.
Shares in the company plunged 20 per cent in early deals after the announcement.
Shoe Zone said the lower guidance followed three months of weaker sales due to “unseasonal weather conditions”, compounded by the rising cost of container shipping as vessels continue to reroute away from the Suez Canal.
The company saw its share price slump by more than 9 per cent when it released its annual results in May – two months after it issued a profit warning.
The affordable footwear retailer reported revenue of £76.5m for the 26 weeks to March 30, 2023, up by just 1.5 per cent on last year’s figures.
Store revenue was also down by 2.8 per cent to £59.4m.
The business is currently undergoing a revamp of its physical estate. At the end of the period, it traded out of 309 stores, a reduction of 27 compared to 12 months ago and 14 lower compared to last year’s end.