Shoe Zone saw a nearly 20% drop in its shares on Tuesday morning after issuing a caution about its trading performance.
Company CEO Anthony Smith noted that the retailer’s results in the first half were slightly below projections due to unexpected higher expenses.
Smith pointed to increased shipping costs resulting from the recent attacks in the Red Sea, the rise in the National Living Wage, and a slower conclusion to the Autumn/Winter season as contributing factors.
Following the announcement, Shoe Zone shares fell by 17%, decreasing from 291p to 241p this morning.
In January, Shoe Zone had reported a 19% surge in pre-tax profits to £16.2m and a 6% rise in sales to £165.7m for the 52 weeks ending on 30th September 2023.
The retailer’s sales traditionally peak in the second half of the year, covering the summer and back-to-school shopping periods.
Smith commented, “The past financial year marked another successful period of growth, during which we continued our store refurbishment and relocation strategy.”
He added, “In the current financial year, our trading performance is slightly below expectations due to an unexpected increase in the National Living Wage, escalating container costs related to the situation in the Suez Canal, higher expenses linked to property improvements, and the impact of a slower end to our Autumn/Winter season than anticipated.”
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