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Shoe Zone raises profit guidance after better-than-expected sales

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Shoe Zone has lifted its profit targets after recent sales were better than the company expected.

Shares in the discount shoe retailer, which runs 410 stores across the UK, rose sharply after the update.

It told shareholders on Monday morning that its now expects its profits for the past year to surpass pre-pandemic levels.

Shoe Zone said its pre-tax profit for the year to October 2 is expected to have been between £9 million and £10 million.

The firm had previously guided that it would reveal a profit of at least £6.5 million.

This represents a significant improvement on the £14.6 million loss it posted for the previous financial year, as well as the £6.7 million figure it saw in 2019, before it was hammered by the pandemic.

The group has closed around 60 stores since the start of the pandemic.

Nevertheless, the Leicester-based company said recent underlying trading has been “better than expected” amid a recovery in high street footfall.

The retailer said it is also undertaking a review, which saw the business conclude that its does not need to recognise £1.5 million in one-off pension contribution within its figures, helping to boost its profits for the year.

Shoe Zone also said it has seen a £400,000 boost to its forecast from favourable exchange rates during the year, particularly versus the dollar.

Shares were 8.3% higher at 98p in early trading.

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