Shoe Zone reveals drop in FY17 profit, revenues down 1.2 percent

In its preliminary results announcement for the 52 weeks to September 30, 2017, Shoe Zone Plc said that profit before tax decreased from 10.3 million pounds (13.9 million dollars) to 9.5 million pounds (12.8 million dollars), a reduction of 7.3 percent. This, the company said, was primarily due to the impact of foreign exchange resulting from the weaker pound on the cost of imports from the Far East. Earnings per share decreased 7 percent to 15.8p against 16.9p last year, while revenues of 157.8 million pounds (213.3 million dollars) reduced by 1.2 percent compared to 159.8 million pounds (216 million dollars) in the previous year.

Commenting on the annual trading update, Nick Davis, Chief Executive of Shoe Zone plc, said in a statement: “We are still well positioned in the market given our strong value retail proposition and continue to manage our store portfolio successfully through our ongoing store rationalisation and refit programme. Following a successful trial of the Big Box concept during 2017, we are now targeting 10 new Big Box stores per year in the medium term. The Board remains positive about the outlook for the group for the remainder of the year.”

Shoe Zones continues to shut loss-making stores to boost revenues

Shoe Zone Plc attributed the decline in revenues to the continued planned closure of loss making stores, with the majority of the loss in revenue in the first half of the year. Loss making stores, the company said, now make up only 6 percent of the Shoe Zone portfolio, having been 11 percent three years ago. Overall store numbers reduced by a net 14 branches to 496 at the year-end compared to 25 branches closed leaving a total of 510 in 2016.

During the year the group opened 21 new stores and completed 29 refits, spending 5 million pounds (6.7 million dollars) compared to 3.4 million pounds (4.6 million dollars) in 2016, on capital expenditure.

Multichannel growth was strong with revenues excluding store orders increasing by 34.5 percent against 11.4 percent in 2016, and now contributes 5.3 percent to the total sales. Shoe Zone Plc said that contribution from multichannel increased to 2 million pounds (2.7 million dollars) in the year. The company further added that product gross margin strengthened to 63.2 percent reflecting further increases in direct sourcing, successful negotiations with suppliers and management of write downs.

The Shoe Zone Plc board is proposing a final dividend of 6.8p per share, resulting in a total dividend for the year of 10.2p compared to 10.1p per share last year.

Picture:Shoe Zone Plc website