Shoe Zone profits flat but revenue nudges up

Value footwear retailer Shoe Zone saw adjusted profit before tax remain flat at £2.5 million in its half-year interim results - for the 26 weeks to 30 March 2024.

In the period, total revenues inched up to £76.5m, against £75.4m for H1 2023.

Store revenues decreased by -2.8% (£1.7m) to £59.4m from £61.1m in H1 2023. That was trading out of 309 stores, a reduction of 27 stores compared to 12 months ago.

Digital revenue increased 19.6% (£2.8m) to £17.1m, up from £14.3m in H1 2023, “with strong performance across all online channels” and additional growth from its online exclusive range and range extensions.

In the first half-year, Shoe Zone closed 29 stores, opened 15 new format stores and refitted 15 original stores to its new format. In total, Shoe Zone is now trading out of 147 original stores and 162 new format stores.

In a statement, the company said: “We are actively working to relocate and refit further stores in the second half of the year, together with a number of stores currently in the pipeline, opening before Christmas.”

Looking ahead, Shoe Zone has downgraded its full year profit before tax from £15.2m to £13.8m, a reduction of £1.4m.

It says that at the point at which the original forecast was prepared the consensus was that the National Living Wage would increase to £11.08, but when announced, the increase was to £11.44 which adds £0.4m of cost to Shoe Zone’s second half-year.

It also attributes the forecast drop to “the continuing disruption in the Middle East” which has increased shipping times and container prices - adding “a minimum of £0.5m of cost”.

Additionally, due to the large number of stores Shoe Zone has closed, particularly in Scotland, it has provided for an additional £0.5m of dilapidations.