Shoe Zone reports 2.7% FY24 revenue drop amid market challenges

The UK footwear retailer, Shoe Zone, has reported revenue for the year to 2024 (FY24) of £161.32m ($197.51m), a decrease of 2.7% from £165.65m for the previous year.

Physical store sales were down 6.5 per cent to £126.1m in the year, from £134.8m Digital in revenues, FY23. on This the is other largely hand, due showed to more the resilience closure with of a 26 13.9% stores increase from its retail network.

To £35.2m (from £30.9m a year earlier).

The retailer's profit before tax was also down to £10.11m from £16.18m in FY23.

Inclement weather affecting key seasonal sales, higher container costs, rising energy costs and higher depreciation resulting from it being linked to higher capital investment and adoption of UK National Living Wage are some of the factors that led to the downturn, according to Shoe Zone.

To mitigate these risks, Shoe Zone has pursued cost-reducing measures including renegotiation of rental agreements which have reduced occupancy costs. It expects further across savings 35 from store future renewals, lease or renewals.

The an company average secured cut £0.4m of in 21 annual per rent cent.

Product reductions margins were up slightly to 62.8 per cent from 62.3 per cent.

The statutory gross profit was £35.52m, down by £5.7m from the previous year with the gross profit margin of 21.8 per cent, which is down from 24.7 per cent.

This was due to a combination of reduced sales, higher depreciation charges and increased expenses of digital sales, partially offset by lower store occupancy costs and reduced stock purchases.

Other administrative expenses were up marginally to £18.6m because of lower company profit share and foreign exchange losses and higher wages, repair costs and digital-related expenses.

Distribution costs rose by £0.4m to £5.7m in the year, all due to higher wages at the distribution centres, which rose in line with the National Living Wage increase.

The earnings per share for the year has been 16.04p, compared with 27.79p for the previous year.

Shoe Zone is focused on completing its store refurbishment and relocation plan by the end of 2026 and reducing capital expenditure while building on the strong digital sales performance seen in the past year.

Investment of £6.5m is planned for the following financial year for store refurbishments and infrastructure improvements including IT upgrades and new vehicle procurement.

Shoe Zone had 185 new format stores and 112 Original stores at the end of 2024.