Shoe Zone raises profit guidance as early summer trading is good
Budget footwear retailer Shoe Zone issued a trading update less than a month ago, but it delivered another on Tuesday and unlike some updates that come in quick succession, this one didn’t contain any bad news.
Quite the reverse, in fact. In a very brief stock exchange statement, the company said it’s “pleased to announce that since the publication of its trading update on 29 June, trading has been stronger than expected due to higher than expected demand for summer products, particularly in the last two weeks”.
That’s perhaps no surprise given the arrival of the school summer holidays and the unexpectedly hot weather that the UK has experienced in recent weeks.
Importantly too, the business has “continued to experience margin improvements as a result of good supply chain and cost management”.
As a result, it now expects adjusted profit before tax for FY22 to be no less than £9.5 million.
It was good news from a company that has had its ups and downs in recent years and that could have been seen as being vulnerable during the cost-of-living crisis given the lower incomes of many of its customers.
In late June the company had said that since the publication of its interim results in May, the business “has been trading well and has also seen strong margin improvements and cost savings, in particular as a result of rent reductions and good supply chain management, which are expected to continue into Q4”.
That meant it predicted an adjusted profit before tax for FY22, of not less than £8.5 million. Today’s upgrade therefore marks a significant improvement and it’s clear that the firm’s budget prices are continuing to appeal to a wide variety of income groups.
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