Shoe Zone (LSE: SHOE), the UK footwear retailer, reported an adjusted pre-tax loss of about £1.0m for the 53 weeks to the 3rd of October, against an adjusted profit of £2.4m a year earlier. Revenue fell 4.5% to £142.4m from £149.1m, according to an unaudited trading update today.
The company said the adjusted loss was in line with management expectations. The statutory loss before tax was about £0.6m, compared with a £3.3m profit in FY2025; the adjusted figure excludes a £0.4m foreign exchange revaluation gain.
Sales fell because Shoe Zone traded from 18 fewer stores and consumer confidence kept declining amid general negativity about the UK economy. Profit also bore a full year of the National Insurance increase and a further rise in the National Living Wage, partly offset by better margin.
Product margin rose to about 63.1% from 61.0%, mainly on lower, less volatile container prices and a better Sterling-Dollar rate. Net cash climbed to about £15.1m from £5.9m, helped by lower capital spending, a lower cost of product and a lower cost of sales.
There is no dividend. None was declared at the half-year, and the company expects a nil payout for the full year while it manages cash prudently but actively.
The estate ended at 251 stores, down 6.7% from 269, after 25 closures, seven openings and six refits. That is 211 larger-format stores and 40 original High Street shops. Shoe Zone is limiting capital spending to essentials, and with 211 conversions completed, the pace is slower.
Management is cautious and expects trading to stay subdued. A slower start to autumn and winter hit the last few weeks of FY2026 and is continuing into FY2027.
Container prices rose at the year end on port issues in China, geopolitics and fuel costs, which management expects to hurt margin. A weaker Sterling-Dollar rate and higher fuel costs could add to that, and the company is awaiting the Government’s October 2026 Budget.
“Sales were good when there was a clear reason to buy, such as the warm summer and the Back-To-School season. However, overall discretionary spending remains subdued as consumers exercise greater caution in their expenditure.”
Charles Smith, Chairman of Shoe Zone
The board said it is managing cash with resilience and flexibility in mind, and that the position is healthy. A more detailed update will come with final results in January 2027.