Shoe Zone blames profit warning on poor weather and Red Sea chaos

In a statement published on the London Stock Exchange, Shoe Zone said it now expects adjusted profit before tax for the full year to be “not less than” £10m – around £5m lower than previously expected.

Shoe Zone, which stocks the likes of Kickers, Skechers and Hush Puppies, said the profit warning comes as it battles heightened “cost pressures” due to the ongoing unrest in the Red Sea.

The shoe specialist noted that the “reduction in the supply of shipping vessels” and re-routes away from the Suez Canal have contributed to container prices rising “significantly” over the past six months.

It also became the latest in a line of retailers to attribute poor spring/summer sales and reduced demand to the “unseasonable weather”. The footwear retailer said the months of April through to June were hit particularly hard and sales have been “weaker than expected”.

Store agility

Revenues at Shoe Zone edged up in its most recent trading update despite profits remaining flat in its first half.

Shoe Zone has been focused on rightsizing its store portfolio. It opened 15 stores during the year, completed 15 refits and closed the doors of 29 stores.

In its latest update, chair Charles Smith 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.

“Our average lease length is 2.3 years, which is increasing as we open new stores with five-year leases, but it still gives us the opportunity and flexibility to respond to changes in any retail location at short notice.”