Footwear retailer Shoe Zone has slashed its profit target in half for the full-year citing an overhang from Rachel Reeves’ 2024 Autumn Budget.
The London-listed firm said in a trading update on Wednesday it expects pre-tax profit for the financial year ending September 2025 to be around £2.5m. This marks a stark drop from previous expectations of £5m.
Shares in the firm plunged as markets opened with the stock down nearly 24 per cent to 64.70.
Shoe Zone said it had battled “challenging trading conditions” on the back of a “weakening in consumer confidence” following Labour’s inaugural budget.
The Chancellor hiked taxes to the tune of £40bn in last October with businesses baring a heavy burden after employer’s national insurance contributions was increased.
Consumer confidence fell once more in July, despite expectations of a sunny boost, as speculation mounted for another batch of tax rises in the Autumn.
Sentiment dipped by one point to -19 in July, according to GfK’s Consumer Confidence Index.
Shoe Zone stock stomped
Shoe Zone revealed it had swung to a £2.3m loss in the six months to March 29 2025 earlier this year. In the same period the year prior, the retailer netted a profit of £2.6m.
The business pointed to weighing costs from Reeves changes to the national living wage along with national insurance.
Over the last year shares have suffered a kicking with stock down 40 per cent since August 2024 to 83.40.
Shoe Zone said on Wednesday: “We have seen less discretionary spend, with the continued impact of inflation, interest rates and higher savings rates, all of which have decreased footfall, with a resultant reduction in revenue and profit.”
Still, the firm said it remained “confident” with its underlying strategy.
The company will open its 200th ‘new format store’ – a new design that includes larger, big box stores and incorporates more well-known brands – this month.
It added cash levels were currently higher than the same period last year.