Shoe Zone’s shares plunged on Wednesday following the retailer’s profit warning. The retailer slashed its profit outlook by 50% amid escalating taxes and tough trading conditions.
Criticizing Labour’s disappointing budget, Shoe Zone stated, “Consumer confidence has declined after the Government’s budget in October 2024. Consequently, the Company will face significant additional expenses due to increases in National Insurance and the National Living Wage.”
Consequently, Shoe Zone has revised its adjusted profit before tax forecast for the financial year ending September 27, 2025, to a minimum of £5.0 million, a sharp decrease from the previously anticipated £10.0 million. In light of these developments, the company has also decided not to declare a final dividend for the financial year ending September 28, 2024.
Shoe Zone cites several reasons for this substantial downturn, including diminished consumer confidence following the October 2024 budget, adverse weather conditions impacting sales, and higher operational costs resulting from rises in National Insurance and the National Living Wage.
These obstacles have compelled the retailer to consider closing stores that are no longer financially sustainable.
Shoe Zone will provide an additional trading update in conjunction with the release of its full-year 2024 annual results on January 21, 2025.
Shares are trading 42.31% down at 79.90p at the time of writing.
