Share price takes a kicking at footwear retailer as clouds gather
The share price at Leicester-based budget footwear retailer Shoe Zone slumped dramatically on Tuesday (July 2) after the company issued a profit warning.
The firm said that rising costs and poor sales had meant that profits are expected to be £5m lower than anticipated.
The news spooked investors on Tuesday with Shoe Zone’s share price falling by almost 16% to 128.1p at lunchtime. At one point, stocks plunged to 120p – the lowest for a year. However, by the close of trading yesterday, shares had rallied slightly, to finish at 134.9p.
The company says it’s faced cost pressures from increased container prices, driven by a reduced supply of shipping vessels and continued rerouting from the Suez Canal.
Alongside an increase in shipping costs, Shoe Zone has experienced weaker-than-expected spring-summer sales from April to June.
Shoe Zone’s lowered expectations anticipate its adjusted profit before tax for the financial year ending October 2, will be £10m.
The firm witnessed more than a 9% decline in its share price upon releasing its annual results in May, following a profit warning issued two months earlier
Shoe Zone closed the period with 309 stores, marking a decrease of 27 compared to the previous 12 months and 14 fewer than at the end of the previous year.
