Shoezone shares drop nearly 24% as full-year loss, slow autumn start hit

Shoezone shares plunged nearly 24% on Tuesday after the British footwear retailer said it expected to swing to a full-year loss and warned that a slow start to the autumn season was hurting trading.

Shoezone expects an adjusted loss before tax of about £1 million for the 53 weeks to October 3, versus an adjusted profit of £2.4 million a year earlier, in line with management expectations. The figure excludes a £0.4 million foreign exchange gain.

It expects a statutory loss before tax of about £0.6 million, versus a profit of £3.3 million, due to lower sales, a full year of the National Insurance increase and a further rise in the National Living Wage, partly offset by an improved margin.

Revenue fell 4.5% to £142.4 million from £149.1 million as the company traded from 18 fewer stores and consumer confidence continued to decline.

Product margin rose to about 63.1% from 61.0% on lower, less volatile container prices and a better sterling-to-dollar exchange rate. Container prices rose at the end of the year because of problems at Chinese ports, which the company expects to hurt margin.

Net cash rose to about £15.1 million from £5.9 million on lower capital spending and lower product costs.

It expects to declare no dividend for the full year.

Shoezone said the start to the autumn/winter season was slower than expected, hurting the final weeks of the year and continuing into the new year, and cited higher container and fuel prices and weaker sterling against the dollar.

Chairman Charles Smith said it was “a challenging year.”