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Shoe Zone Witnessed a Steep Decrease In Stock Value Due to Reduced Profits


Shoe Zone Witnessed a Steep Decrease In Stock Value Due to Reduced Profits

Shoe Zone faced a significant drop in its stock value earlier today (2 July) following a profit warning highlighting increased shipping costs affecting its profitability for the year.

The company indicated that it encountered escalating expenses linked to container prices due to a shortage in shipping vessels. It also mentioned that in conjunction with the shift away from the Suez Canal amid ongoing disturbances in the Red Sea, container prices have risen substantially over the last six months.

As a result, Shoe Zone expects that its adjusted pre-tax profit for the fiscal year ending on 2 October will fall below £10m.

After the announcement, Shoe Zone’s shares nosedived by almost 19% from 152p to 124p at the commencement of trading on the stock market.

The company also revealed lower-than-anticipated sales in the spring and summer months from April to June, which were attributed to adverse weather conditions.

Recently, Shoe Zone disclosed that it was subject to a cyber attack, resulting in unauthorized entry into certain online systems and information.

Upon discovering the breach, the company promptly implemented its IT security protocols to prevent the unauthorized entry. Shoe Zone mentioned that it does not expect any significant financial consequences from the incident.

Image Source: AVM Images / Shutterstock

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