Tough conditions see losses widen at Shoe Zone

(Sharecast News) - Shares in Shoe Zone tumbled in morning trading on Monday, after the footwear retailer slid further into the red and warned that "challenging" trading conditions were set to continue.

The AIM-listed business, which has 259 stores, saw revenues slide 12% in the 26 weeks to 28 March, to £62.9m, while the pre-tax loss widened to £5.3m from £2.3m a year previously.

Chair Charles Smith said the retailer had been hit by a "very challenging" trading environment, with weak consumer confidence and macroeconomic and geopolitical uncertainty.

Looking to the rest of the year, Smith confirmed that the group's refurbishment programme would continue, albeit at a slower pace.

"Our long-term objective is to be trading out of approximately 260 stores in total and the board expects, subject to market conditions, to complete our relocation and refit programme by the end of 2027." Shoe Zone has now converted 206 stores into the new, larger format.

Smith also reiterated recently downgraded full-year guidance, for an adjusted pre-tax loss of between £1m and £2m.

"Trade continues to be negatively impacted by a further weakening in consumer confidence, following the government's last two budget announcements, as well as the geopolitical issues in the Middle East," he said.

"These macroeconomic factors have increased customer caution, leading to lower footfall and less discretionary spend. The Middle East issues have also resulted in a higher cost of containers and general transportation costs.

"The trading environment continues to be difficult and has been further impacted by worsening geopolitical conditions in the Middle East."

As at 1000 BST, the stock had shed 6% at 42.22p.

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