Shoe Zone PLC (AIM:SHOE) shares slumped as much as 40% in early trade after the discount footwear retailer slashed its profit guidance and scrapped its dividend policy.
The company now expects adjusted pre-tax profit for the year to 27 September to be about £2.5 million, half its earlier forecast of £5 million.
The downgrade follows a tough summer of trading, with June and July hit by what management called a “further weakening in consumer confidence”.
The retailer cited reduced discretionary spending, persistent inflation, high interest rates, and increased savings rates, all of which have dented footfall.
Despite the setback, Shoe Zone highlighted its debt-free balance sheet, cash levels above last year’s, and the opening of its 200th new-format store this month, reiterating confidence in its long-term strategy.
The shares were off 16.2p at 68.8p.