Shares in Footasylum slumped 15 per cent this morning after the shoe shop warned that its full-year profit margin will be squeezed due to increased discounting across the retail sector.
The share price slipped to 27.6p from yesterday's closing price of 32.5p on the news that the retailer will also implement a cost-cutting measures across the business that could result in some exceptional costs in its full-year results.
The company expects to report earnings before interest, tax, depreciation and amortisation (Edbitda) towards the lower end of current forecasts, it said.
Total revenue was up 14 per cent to £102.3m in the 18 weeks to 29 December, and online sales were up 28 per cent to £36m.
Footasylum executive chairman Barry Brown said: "In the context of the current tough conditions on the high street, we are encouraged to have delivered revenue growth across all of our channels and major product categories, with online and wholesale continuing to perform particularly well.
“We have also been pleased by the performance of the five new store openings and three upsizes that we completed in time for Christmas.
“However, the short-term outlook is undeniably challenging, and we continue to maintain our focus on cash, working capital and inventory management, as well as reducing costs across our operations.
“The current trading conditions have led to significant discounting and promotional activity across the sector, and this in turn has impacted our gross margin expectations for FY19."