Shoe Zone PLC (AIM:SHOE) shares tripped 12.6% lower to 45p after the group warned it expects to swing to a full-year loss as trading has deteriorated.
The retailer said it faced “challenging trading conditions” in the first quarter, citing weaker consumer confidence following recent government budgets and the fighting in the Middle East.
These pressures led to lower footfall and reduced discretionary spending, while costs also increased, including container and transportation expenses.
As a result, Shoe Zone now expects an adjusted loss before tax of £1-2 million for the 2026 financial year, compared with previous guidance for a £1 million profit.
The company said trading in the second half is also expected to be affected by the same pressures.
Despite the downgrade, Shoe Zone highlighted that it remains debt-free, with a strong cash position at the end of March higher than at the close of the 2025 financial year.
The group added it will report interim results in early May.