Shoe Zone Sees Profit Decline as UK Retail Pressures Weigh on Stores, While Online Sales Advance

Shoe Zone (LSE:SHOE) reported a marked drop in full-year revenue and earnings for the 52 weeks ended 27 September 2025, reflecting a difficult UK retail environment characterised by subdued consumer confidence, ongoing inflation and rising wage costs. Group revenue fell 7.6% to £149.1m, while profit before tax declined to £3.3m from £10.1m a year earlier. Earnings per share decreased to 4.08p and no dividend was declared for the period.

Despite the weaker profitability, the company strengthened its balance sheet, with net cash increasing 64% to £5.9m, supported by lower capital expenditure and a reduced stock intake. Store revenues came under pressure as the retail estate contracted from 297 to 269 outlets. In contrast, digital revenue edged up 2.3% to £36.0m, aided by initiatives such as free next-day delivery and strong performance across third-party online marketplaces.

Operationally, Shoe Zone continued to focus on reshaping its store portfolio, rolling out larger-format locations, securing rent reductions and shortening lease terms to maintain flexibility. Management remains on track to complete its store refit and relocation programme by 2027, after which investment is expected to tilt more heavily towards accelerating online growth.

Looking ahead, the group is forecasting a modest profit before tax in the current financial year, while acknowledging that trading conditions remain challenging amid ongoing pressure on UK household spending. Overall, the outlook points to a business navigating a tough environment with stable liquidity, mixed technical signals and a valuation that appears broadly in line with fundamentals.

More about Shoe Zone plc

Shoe Zone plc is a UK-based value footwear retailer operating a nationwide chain of stores alongside a growing digital platform, including shoezone.com and a mobile app. The company focuses on affordable family footwear, increasingly sold through larger-format stores and supported by an efficient distribution network and in-store returns model that underpins its e-commerce offering.