Shoe Zone cuts full-year profit outlook, shares slide

21st May 2024 11:38

(Sharecast News) - Shoe Zone cut its full-year pre-tax profit forecast on Tuesday due to higher wage bills and supply chain disruptions, as it reported flat interim profits.

In the 26 weeks to 30 March, adjusted pre-tax profit was steady at £2.5m, while revenue ticked up 1.5% to £76.5m.

Store revenue fell 2.8% to £59.4m but digital revenue rose 19.6% to £17.1m.

Shoe Zone noted that during the half, it was trading out of 27 fewer stores compared to 12 months earlier.

The discount shoe retailer cut its full-year pre-tax profit forecast to £13.8m from £15.2m.

"At the point at which the original forecast was prepared the consensus was that the National Living Wage would increase to £11.08, but when announced, the increase was to £11.44 which adds £0.4m of cost in our second half," it explained.

"The continuing disruption in the Middle East has increased shipping times and container prices which adds a minimum of £0.5m of cost and due to the large number of stores we have closed, particularly in Scotland, we have provided for an additional £0.5m of dilapidations."

At 1135 BST, the shares were down 6.8% at 172.40p.