Shoe Zone has issued a trading update for the year to the end of September with the budget shoe and accessories retailer saying group revenue dipped 2.7% to £161.3 million.

That came as its store reduction plan continued, the company being down to 297 locations from 323 a year earlier as it focuses on fewer-but-larger stores. 

The retailer also said that the product margin increased to 62.8% from 62.1%.

However, its earnings expectations are coming in below last year’s profit with adjusted profit before tax expected to be “not less than” £9.5 million. It made £16.5 million in the previous financial year.

Looking at the revenue performance in more detail, it said the 2.7% reduction was due to the “unseasonal weather in the second half of the year, particularly peak summer, as well as trading out of 26 fewer stores”. However, the key three weeks of Back to School trade in August and September were “positive and ahead of the same period last year”.

The margin rise was primarily due to lower container prices for the first half of the year. Yet it started to see container prices increase again from March onwards, impacting the second half of the year and this will continue into H1 2025.

Chairman Charles Smith said: “A year of two halves, with the first half trading in line with expectations and ahead of the previous year, however, the second half trading was below expectations. [But] our Digital business continued to grow, driven by the introduction of free next-day delivery for all shoezone.com orders.”