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Highlights
- Revenue Shift: Total revenue at £161.3m, with digital sales rising to £35.2m (+14%).
- Store Optimization: Transitioned to 185 new-format stores, with 53 closures and 27 relocations.
- Dividend Reduction: Dividend cut to £1.2m (2.5p/share) from £8.1m (17.4p/share) in 2023.
Shoe Zone (LSE:SHOE), a leading UK footwear retailer, has announced its audited results for the 52 weeks ending September 28, 2024. The results reflect a challenging trading period, with a decline in total revenue and profits but notable growth in digital sales and strategic adjustments to its store portfolio.
Financial Performance
Shoe Zone reported total revenue of £161.3m, down from £165.7m in 2023. The decline was driven by reduced store revenue (£126.1m, compared to £134.8m in 2023). However, digital revenue grew by 14%, reaching £35.2m, up from £30.9m the previous year.
Profit before tax fell to £10.1m from £16.2m in 2023, with adjusted profit also dropping to £10.0m (2023: £16.5m). Earnings per share stood at 16.04p, a decrease from 27.79p the previous year. The dividend was significantly reduced to £1.2m (2.5p per share) compared to £8.1m (17.4p per share) in 2023.
The company ended the period with a net cash balance of £3.6m, down from £16.4m in 2023. This decline reflects investments of £11.5m in capital expenditures and £8.0m in dividends during the period.
Operational Highlights
Shoe Zone has been actively reshaping its store portfolio to align with consumer preferences and improve operational efficiency. Key changes include:
- Store Formats: Transitioned 50 stores to its new, larger format, increasing the total to 185 (2023: 135).
- Closures and Relocations: Closed 53 original-format stores and relocated 27 locations to better-performing sites.
- Lease Savings: Achieved annualized lease renewal savings of £0.4m, with an average lease reduction of 21% and a slightly extended average lease length of 2.5 years (2023: 2.2 years).
The company’s digital segment also showed improvement, with a reduction in the return rate to 11.4% (from 11.8%) and the introduction of free next-day delivery for all online orders via shoezone.com.
CEO Commentary
The CEO of Shoe Zone expressed optimism about the company’s strategic adjustments despite financial challenges. "Our focus on digital growth and optimizing our store footprint positions us to navigate market headwinds effectively. The success of our new-format stores and continued investments in technology are vital components of our strategy."
