Shoe Zone has warned investors to expect a £1 million full-year loss after reporting declining sales driven by cost pressures, cautioning that consumer confidence remains fragile.
Shares in the footwear retailer fell by as much as 22% after it revealed a 4.5% drop in revenues to £142.4 million for the 53 weeks to October 3.
Underlying loss and profit decline
The company said it anticipates swinging to an underlying loss of approximately £1 million for the full year, compared with profits of £2.4 million in the preceding year.
Shoe Zone flagged that the autumn/winter trading period had proved slower than anticipated, weighing on the closing weeks of its financial year and continuing to drag into the opening quarter.
Store closures and portfolio changes
Revenues were further dampened by store closures, with the retailer's portfolio shrinking to 251 outlets by the year-end, down from 269 in October 2025.
The Leicestershire-based chain highlighted its ongoing efforts to relocate and modernise its retail estate into larger, more contemporary formats, a transformation it aims to complete by the end of 2027. Its portfolio now comprises 211 larger-format stores alongside 40 traditional high street outlets.
Consumer confidence and external pressures
Chairman Charles Smith said: "This was a challenging year, particularly in the first half, as consumer confidence continued to be weak, and fell further following the Government's November 2025 budget, with persistent inflation, higher interest rates remaining elevated and reduced levels of disposable income all contributing to a generally negative economic and consumer sentiment in the UK."
He added: "Sales were good when there was a clear reason to buy, such as the warm summer and the Back-To-School season. However, overall discretionary spending remains subdued as consumers exercise greater caution in their expenditure."
The company also informed investors that the conflict in Iran had led to higher fuel and transport costs and driven up the price of shipping containers, which it cautioned could impact financial performance.
It said: "We continue to monitor the macro and geo-economic/political environment closely and await the outcome of the Government's October 2026 Budget. We have recently seen an increase in container prices and a weakening of Sterling to Dollar exchange rate, as well as an increase in fuel prices, all of which could negatively impact trading."
