Shoe Zone Slumps After Warning on Profit and Consumer Weakness

Shoe Zone (LON:SHOE) shares tumbled on Wednesday after the discount footwear retailer warned of a sharp drop in annual profit and scrapped its dividend policy, citing a further weakening in consumer confidence.

The stock fell as low as 55p before recovering slightly to trade around  67.6p, down 20.4% on the day. Shares are 21% lower in 2025 and have slumped 52% over the past 12 months.

The company said trading in June and July had been “challenging,” with a continued pullback in discretionary spending since the UK government’s October 2024 budget. 

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Shoe Zone pointed to the ongoing impact of inflation, interest rates and higher savings rates, which have reduced footfall and led to a drop in revenue and profit.

Adjusted profit before tax for the year to 27 September 2025 is now expected to be about £2.5 million, half its previous forecast of £5 million. In response, the board has withdrawn its current dividend policy.

Despite the downgrade, management expressed confidence in the company’s longer-term strategy. 

The retailer will open its 200th new format store this month, remains debt-free, and reported cash levels above those seen at the same point last year.

The company’s new format stores sell additional brands such as Skechers, Hush Puppies, Rieker and Lilley & Skinner. Shoe Zone operates more than 200 stores across the UK.