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.

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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. 

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 In response, the board has withdrawn its current dividend policy.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.