Shoe Zone warns on profits amid weakening consumer confidence

(Sharecast News) - Shoe Zone warned on Wednesday that it now expects to swing to a full-year loss as it cited weakening consumer confidence and the conflict in the Middle East.

In a brief trading update, the value shoe retailer said it now expects an adjusted pre-tax loss of �1m to �2m for the year ending 3 October 2026, versus previous expectations for an adjusted pre-tax profit of �1m.

The company said it has experienced "challenging trading conditions, principally due to a continued weakening in consumer confidence, following on from the Government's last two budget announcements, and the geo-political issues in the Middle East".

"These macroeconomic factors have increased customer caution, leading to lower footfall, less discretionary spend and additional costs such as container prices and transportation costs, with a resultant reduction in revenue and profit."

Shoe Zone also expects second-half trading and costs to be impacted.

The group said it remains debt free and confident in its cash management, with cash levels at the end of March 2026 higher than the year end position for FY25.

It is due to release its interim results in early May.

At 0940 BST, the shares were down 12.6% at 45p.

Russ Mould, investment director at AJ Bell, said: "Shoe Zone has taken a step backward as life becomes harder for the discount retailer. A more cautious consumer, lower footfall to its stores, and extra costs linked to the Middle East crisis has put an end to its dream of making a profit this year.

"The company has issued a profit warning, saying it now expects to make a loss for the year to 3 October. For a business that sells essential items at low prices, one might be surprised at the number of setbacks over the years. Its journey has been wobbly, but these challenges have given it plenty of experience at coping with headwinds."

See latest RNS on Investegate