Shoe Zone (AIM:SHOE) has reported an adjusted pre-tax loss of approximately £1.0 million for the 53 weeks to 3 October, in line with management expectations and a reversal from an adjusted profit before tax of £2.4 million in the prior year.
The London-listed discount footwear retailer, which trades from a nationwide UK store estate alongside an online channel, said revenue fell 4.5% to £142.4 million for the full year, down from £149.1 million, as the group traded from 18 fewer stores and consumer confidence remained weak.
Store numbers dropped 6.7% to 251, from 269 a year earlier, after the company closed 25 sites, opened 7 and refitted 6, leaving a portfolio of 211 larger-format stores and 40 original High Street shops.
Product margin improved to approximately 63.1%, from 61.0% in the prior year, helped by lower and less volatile container prices and a more favourable sterling-to-dollar exchange rate, though the company said container prices rose late in the year due to disruption at Chinese ports and geopolitical pressure on fuel costs.
Net cash rose to approximately £15.1 million at year-end, up from £5.9 million, driven by lower capital spending, reduced product costs and an overall fall in cost of sales.
This builds on the trading update issued in August, when the company reported cash and equivalents of around £7 million at 25 July, ahead of its original budget, and had already reiterated guidance for an adjusted pre-tax loss of no more than £1 million.
The statutory loss before tax for the year is expected to be approximately £0.6 million, against a statutory profit of £3.3 million a year earlier, with the gap to the adjusted figure explained by a £0.4 million foreign exchange revaluation gain.
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Shoe Zone declared no dividend at the half-year and expects to declare none for the full year, maintaining what it called prudent but active cash management.
Chairman Charles Smith said trading conditions were toughest in the first half as consumer confidence weakened further after the government's November budget, though sales picked up "when there was a clear reason to buy, such as the warm summer and the Back-To-School season".
The company noted that the start to the autumn/winter season had been slower than expected, affecting the final weeks of the financial year and continuing into the new year, and that it was watching for the outcome of the government's October budget alongside recent increases in container prices, fuel costs and a weaker pound against the dollar.
Shoe Zone said a more detailed update will follow at its final results in January.