Shoe Zone revenue falls 4.5% to £142.4 million as it swings to a loss
Key Facts
Shoe Zone on October 27 issued an unaudited preliminary update for the 53-week financial year ended October 3, 2026, reporting lower revenue and a swing in adjusted profit to a loss. The company said revenue fell 4.5% to £142.4 million, from £149.1 million a year earlier. Management expects an adjusted pretax loss of about £1 million, compared with adjusted profit of £2.4 million in fiscal 2025. The statutory pretax loss is estimated at about £0.6 million. The update remains preliminary and unaudited, and the company plans to publish its final, detailed results in January 2027.
The store estate contracted 6.7% during the financial year to 251 stores, compared with 269 a year earlier. The company said lower revenue was partly linked to trading through 18 fewer stores, illustrating the effect of the smaller estate on business volume. Trading remained weak in the final weeks of the financial year, management said. It added that the autumn-winter season got off to a slower start than expected. The company said that sluggishness continued into the new 2027 financial year, putting the current season’s performance at the center of investor attention ahead of its next results.
Despite lower sales, product margin rose to about 63.1% in fiscal 2026, from 61.0% a year earlier. The company said container prices rose toward the end of the year, warning that this could weigh on margin in coming periods. Net cash also increased to about £15.1 million, from £5.9 million in fiscal 2025. Management attributed the increase mainly to lower capital expenditure, product costs and total cost of sales. These indicators show improved margin and liquidity alongside lower revenue and an expected pretax loss.
Shoe Zone warned of several pressures on trading in the period ahead, including higher container prices, sterling’s weakness against the dollar and rising fuel prices. The company said these factors “could adversely affect trading.” Higher container prices had already emerged at the end of the financial year, with the possibility of a later impact on product margin. Commenting on the UK economic environment, Chairman Charles Smith said persistent inflation, interest rates remaining elevated and falling disposable income had contributed to weak economic and consumer sentiment. Management linked this to the trading backdrop in which the company operates, without providing a numerical estimate of each factor’s impact on results in the update.
On capital policy, the company declared no distribution for fiscal 2026, having also announced no dividend with its first-half results. It said it expects to maintain cautious, active cash management, with a zero distribution for the full year. In August, it launched a share buyback programme with a maximum total value of about £3.47 million, due to end on October 26, 2026, unless the authorised limit was reached earlier. In July, the stock jumped 19% to 59.50 pence in afternoon London trading after the company upgraded its full-year outlook. These earlier moves provide context for the stock’s trajectory during the year, but do not by themselves determine its response to the October update.
The company’s official financial calendar indicates that its annual trading update is scheduled for October 2026, while results for fiscal 2025/2026 are due in January 2027. Shoe Zone said a more detailed update would accompany the final results in January. Those results will include audited figures for the financial year ended October 3, 2026, following the preliminary estimates for the loss and revenue provided by the company in October. They will also allow investors to assess performance during the period in which management said the slow season extended into the new financial year. Until then, the figures in the update remain unaudited estimates issued by the company.