Shoe Zone has lowered its profit outlook for the second time this year as rising costs weigh on trading and profitability.
The footwear retailer said it expects to deliver an adjusted pre-tax profit of £2.5m for the year to 27 September, down from its previous revised guidance of £5m and initial forecast of £10m.
In a trading update, Shoe Zone said that in June and July it had experienced “challenging trading conditions”, which it blamed on a “further weakening in consumer confidence” following last year’s autumn Budget announcement.
“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,” the retailer said.
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Shoe Zone added: “Management remain confident with the underlying strategy, with the 200th new format store opening this month”.
The retailer swung to a pre-tax loss of £2.3m in the 26 weeks to 29 March, down from a profit of £2.6m, following a “difficult” trading environment in the first half.
Sales dropped 6.5% to £71.5m, dragged down by a 10% fall in store revenue to £53.3m from trading out of 31 fewer stores in the period.
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