Shoe Zone store exterior
The value footwear seller and cost-of-living crisis winner has delivered another upgrade / Image source: Adobe
  • Strong second-half sales
  • Record profits generated
  • Guidance upgraded yet again

Shares in Shoe Zone (SHOE:AIM) rallied 8.2% to 230p after the budget footwear retailer said adjusted pre-tax profit for the year to 30 September 2023 was expected to be ‘not less than £16 million’.

That implies growth of more than 43% on last year’s £11.2 million and is 18.7% ahead of broker Zeus Capital’s £13.5 million forecast despite earlier upgrades in both June and July.

The value shoes, sandals, slippers and boots seller enjoyed strong second half trading, particularly in the peak summer and key ‘Back to School’ periods, as well as improved product margins attributed to lower freight container rates and improved stock management.


Shoe Zone’s sales skipped 6.1% higher to £165.7 million in the 12 months to 30 September, despite the discounter ending the year with 323 brick and mortar stores, 37 fewer than last year.

However, digital revenue rose 17% to £30.9 million, this continuing growth representing ‘validation of the ongoing investment in our digital platform’ according to management.

Primary Health Properties CEO buys after upgrade


Chief executive Anthony Smith said Shoe Zone had ‘a strong year, continuing the momentum gained from the positive year we had in 2022. We continue our strategy to expand our Hybrid and Big Box formats via refits and relocations and new stores. Shoe Zone continues to show how resilient it is, with a proven track record of delivering robust results during times of economic uncertainty.’

Shoe Zone also reported a robust year-end balance sheet with £16.4 million of net cash in the coffers, even after distributing £8.2 million in dividends, £6.4 million in share buybacks and £11.3 million of capital expenditure.


Zeus Capital raised its full year 2023 earnings per share estimate by a further 20.0% to 26.1p and its full year 2024 forecast by 26.3% to 24.7p to reflect the fresh guidance.

The broker insisted the current valuation remains ‘a compelling entry point for a business that has consistently outperformed. Shoe Zone is positioned in a defensive niche of the consumer market, with a best-in-class management team and a clear strategy for profitable growth.’

Russ Mould, investment director at AJ Bell, commented: ‘Shoe Zone has proved to be one of the few beneficiaries of the cost-of-living crisis and it is still in a sweet spot.

‘Despite operating from fewer stores, sales, margins and profits are all going up. Everyone needs footwear but not everyone can afford to shop wherever they like. That’s why Shoe Zone has done well, thanks to its low-price points and value for money products.’

Disclaimer: Financial services company AJ Bell referenced in the article owns Shares magazine. The author of the article (James Crux) and the editor of the article (Ian Conway) own shares in AJ Bell.


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Issue Date: 17 Oct 2023