Shoe Zone shares jump despite store closures putting dent in sales

 
Kasmira Jefford
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Shoe Zone has been closing stores and opening in more profitable locations instead (Source: Shoe Zone )

Shoe Zone shares have risen 5.6 per cent today after the discount footwear chain said it was on track to meet full-year profits, despite a drop in sales.

The family-owned chain, which floated on Aim last year, struggled in the autumn of last year after the unusually warm weather hurt demand for winter footwear and prompted the company to issue a profit warning in April.

The company said it expects results for the year to 3 October to be in line with revised expectations, with analysts Numis predicting pre-tax profits of £10m.

However the retailer warned that full-year sales are likely to be lower at £166.8m compared with £172.9m the previous year, after it closed 28 stores. The group also opened 18 new stores and now has an estate of 535 across the country.

Numis analyst, Matthew Taylor, kept is “add” recommendation and said it expects “the store portfolio strategy, falling rental costs and product range development to deliver steady profit growth over the next couple of years”.

“Coupled with the balance sheet and cash characteristics, we view the valuation as attractive,” he said.

Shares closed at 194.29p, above its initial offer price last year of 160p.

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