Shares in the British low-cost footwear retailer jumped by more than 8 percent after it reported a sales increase for the year ended on Oct. 5, 2019, while profits matched analysts' expectations.
Revenues rose by 0.8 percent from the previous year to 161.9 million pounds (€187.5m-$207.8m), lifted by the retailer's new “Big Box” store format and online sales.
In a preliminary report, Shoe Zone said that it expects to report profits for the period that are in line with market expectations. This comes after the company issued a profit warning in August that led to the departure of its chief executive, Nick Davis, after three years in the post.
The management explained that trading conditions in the second half of the financial year were “challenging,” but that sales at Big Box stores continued to progress strongly. The company ended the year with 500 stores, having opened 24 and closed 16 during the period.
Out of the total 24 store openings, 21 were based on the Big Box format, two were “high-street” shops and one was conceived on the basis of a new hybrid format. At the start of the year the company initiated trials for this hybrid store format, which is meant to be rolled out in more affluent areas. The stores sell the whole range of shoes sold in the Shoe Zone stores and in the chain's Big Box stores, without conflicting with the offer at other retailers.
The company now has 40 active Big Box stores, in line with the group's target of 45 units by the end of 2019. A further 20 Big Box are planned to open in 2020.
The retailer, which sells about 18 million pairs of shoes a year with an average retail price of around £10 (€11-$13) a pair, will announce its final results for the latest fiscal year on Jan. 8, 2020.