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

Results showed a revenue of £76.5m for the 26 weeks ending March 30, 2023, reflecting an increase of 1.5% compared to the previous year. Store revenue declined by 2.8% to £59.4m. 

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.

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