Shoe Zone (LON: SHOE) shares plummeted Wednesday after the footwear retailer issued a profit warning, citing “very challenging trading conditions”.
The stock is currently down over 44% following the news.
The company revealed it now expects adjusted pre-tax profit for the financial year ending 27 September 2025 to be at least £5 million, representing half of the previous forecasts of £10 million.
The downbeat outlook follows weak trading in the first two months of the financial year and the first half of December.
Shoe Zone said the poor performance was due to a decline in consumer confidence and unseasonal weather, both of which have negatively impacted its revenue and profit.
Furthermore, the retailer said there was a further weakening of consumer confidence following the October 2024 budget, while they expect it to significantly impact the business.
Increased National Insurance contributions and a rise in the National Living Wage, also stemming from the budget, are expected to impose substantial additional costs on the company.
“These additional costs have resulted in the planned closure of a number of stores that have now become unviable,” said Shoe Zone, adding that the factors “will have a significant impact” on its full-year figures.
Shoe Zone has also decided not to pay a final dividend for the financial year ending 28 September 2024. The company will report its FY2024 annual results on 21 January 2025.
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