Investing.com -- Shares of Shoe Zone Plc (LON:SHOE) tumbled by more than 40% on Wednesday after the retailer issued a grim trading update, citing challenging market conditions and a sharp decline in profit expectations for the current financial year.
The company in a statement said, “it has experienced very challenging trading conditions, principally a weakening of consumer confidence and unseasonal weather, both of which have decreased revenue and profit.”
Shoe Zone said that the deteriorating economic backdrop, worsened by the UK Government’s October budget, which it said had further eroded consumer confidence.
The budget introduced increases in National Insurance and the National Living Wage, measures that have also added significant costs for the company.
Shoe Zone said that these cost pressures had rendered several of its stores financially unviable, leading to planned closures.
The combination of reduced consumer spending and rising operational costs, it said, will have a “significant impact” on its full-year results.
The company now expects adjusted profit before tax for the financial year ending 27 September 2025 to come in at no less than £5.0 million, a stark reduction from its previous forecast of £10.0 million.
Additionally, Shoe Zone confirmed it would not be paying a final dividend for the financial year that ended September 28, citing the need to manage its finances in light of the difficult trading environment.