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Shoe Zone shares tank after profit warning, dividend cancellation
(Sharecast News) - Shoe Zone's share price plummeted on Wednesday after the high street footwear retailer halved its profit forecasts for the current financial year and cancelled its dividend. The company said that it experienced "challenging trading conditions" over June and July, blaming the ongoing negative impact from the government's Autumn budget last year on consumer confidence.
"We have seen less discretionary spend, with the continued impact of inflation, interest rates and higher savings rates, all of which have decreased footfall, with a resultant reduction in revenue and profit," Shoe Zone said in a statement to the market.
As a result, adjusted pre-tax profit for the year ending 27 September is now expected to be just £2.5m, down from earlier predictions of £5.0m and the £10.0m made last year.
The company said it was also withdrawing its current dividend policy, having paid out £8.0m to shareholders last financial year.
"Management remain confident with the underlying strategy, with the 200th new format store opening this month. The company remains debt free and confident in our cash management, with cash levels currently higher than the same period last year," the company said.
Shares were 21% lower at 67p by 0829 BST.
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