Shoe Zone sees shares on the back foot after wet summer impacts sales

Shoe Zone has issued a warning that it anticipates annual profits to fall by over 40% after summer conditions impacted sales.

The retailer said that pre-tax profits are predicted to be "not less than" £9.6m in the year leading up to September 28, marking a 41% decrease from the £16.2m reported the previous year. It blamed this decline on challenging trading during the crucial summer season, with unseasonal weather resulting in lower-than-expected sales and full-year revenues falling 2.7% to £161.3m.

Additionally, the company's performance was hindered by recent measures to reduce its store estate, leading to the closure of 26 sites on a net basis, leaving it with 297 at the end of the year. Shoe Zone also noted that the drop in profits was due to an increase in its wage bill following April’s rise in the national minimum wage, as well as higher costs for shipping and energy.

Shares in the group experienced a significant drop, falling as much as 13% at one point on Tuesday, before recovering slightly to stand 2% lower in afternoon trading. Chairman Charles Smith described the past year as "a year of two halves".

He said: "Second-half trading was below expectations due to unseasonal weather conditions, particularly at peak summer; however, our key Back to School period traded above expectations at the end of the year,".

The group, which employs approximately 2,250 workers, has been restructuring its estate, closing 53 sites, opening 27 and revamping 28 over the year as part of ongoing efforts to increase its number of new larger stores.

"We are continuing our strategy to expand the number of new format stores through relocations and refits of existing High Street stores," the company stated.