Investors were caught off-guard in April when retailer Shoe Zone (SHOE) admitted that its half-year figures would fall short of market expectations. Management said last autumn's mild weather prompted higher-than-expected sales of low-priced ankle boots over more expensive knee-high varieties. But these interim figures also make clear that sales have suffered from the closure of nine loss-making stores. By the end of the period, Shoe Zone had 541 trading stores, compared with 545 last October.
On a brighter note, trading in the nine weeks to 6 June has met expectations, with a particularly strong performance from the online business. Shoe Zone launched an official eBay store last October, and its Amazon partnership is also doing well. In the first half eBay sales accounted for 7 per cent of 'multi-channel' (ie, non-store) revenue, with Amazon contributing a further 17 per cent. The market responded positively to the upbeat outlook statement, sending the shares up 7 per cent on the morning the results came out.
Having downgraded their forecasts after the profit warning in April, analysts at Numis expect pre-tax profits of £10m for the year to September, giving EPS of 15.8p (FY 2014: £11.4m and 17.9p).
| SHOE ZONE (SHOE) | ||||
|---|---|---|---|---|
| ORD PRICE: | 172p | MARKET VALUE: | £86m | |
| TOUCH: | 168-175p | 12-MONTH HIGH: | 270p | LOW: 159p |
| DIVIDEND YIELD: | 4.0% | PE RATIO: | 11 | |
| NET ASSET VALUE: | 61p | NET CASH: | £5.9m | |
| Half-year to 4 April | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 82.9 | 2.7 | 3.7 | 0.0 |
| 2015 | 78.2 | 2.0 | 3.2 | 3.2 |
| % change | -6 | -27 | -13 | - |
Ex-div: 22 Jul Payment: 19 Aug | ||||
