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Highlights

  • Shoe Zone reports a £2.6 million adjusted loss before tax for H1, reversing a prior-year profit.

  • Revenue falls 6.5% to £71.5 million; store sales drop 10.3% while online grows 6.4%.

  • Shares tumble 19% following results, trading at 93p after recent recovery to 115p.

Shoe Zone PLC (LSE:SHOE) shares dropped by 19% on Tuesday after the footwear retailer reported a swing to a first-half loss and highlighted ongoing weak trading conditions due to low consumer confidence.

The company had previously issued a profit warning in December, cutting its full-year profit before tax forecast in half to £5 million. In its latest results, Shoe Zone confirmed that trading in the first quarter remained difficult, with only marginal improvement seen since then.

“Trading continues to be difficult as consumer confidence continues to be low,” the company stated in its half-year results.

For the 26 weeks ending 29 March, total revenue declined by 6.5% to £71.5 million. Store revenue was down 10.3% to £53.3 million, while digital revenue saw a 6.4% increase, reaching £18.2 million.

Shoe Zone posted an adjusted loss before tax of £2.6 million, a reversal from the £2.5 million profit reported for the same period last year.

Despite the downturn, the company noted some positive developments that are expected to support the business in the second half of the financial year. “During the second quarter, we have seen more stability/reduction in the price of containers, and a strengthening of sterling against the dollar, both of which will start to benefit in the second half of this financial year,” the company reported.

Shares in Shoe Zone, which had rebounded from a three-year low of below 80 pence in December to 115 pence ahead of the announcement, fell back to 93 pence following the update.

The continued pressure on consumer spending and weak retail sentiment have been key challenges for the company.