Footasylum shares crash 50% after struggling shoe retailer issues profit warning

'No sign of a recovery in the short-term on the high street', premium sports retailer says

Ravender Sembhy

Monday 03 September 2018 11:49 BST

Company blames weak consumer sentiment for earnings which it expects to come in at less than half last year's level (PA)

Shares in Footasylum crashed on Monday after the premium sports retailer warned over full-year profits and sales.

The company said its revenue growth and earnings will come in “significantly lower than previous guidance”.

It now expects to bring in less than half of the £12.5m it booked in earnings last year.

It blamed a “challenging” August and warned there is “no sign of a recovery in the short-term on the high street”.

Footasylum shares went into freefall following the update, with the recently-floated group's stock plunging nearly 50 per cent in morning trade to 44p.

The group said in a statement: “Trading since the beginning of the current financial year has been impacted by weak consumer sentiment on the high street.

“Store performance during July and August was more challenging which, in the context of there being no sign of a recovery in the short-term on the high street, has led the board to reassess its overall expectations for the balance of full-year 2019.”

Footasylum sought to reassure investors that its growth plans would keep the group on track ahead of the critical Christmas trading period.

The company is looking to grow its chain from 65 stores currently to around 150 in the UK, while also expanding outlets in key locations.

The group is also boosting its online offering, with the aim of 50 per cent of total turnover coming from online and wholesale revenues.

Executive chairman Barry Bown said: “These are undoubtedly challenging times in the retail industry and, in common with many other businesses, Footasylum's trading has continued to be impacted by weak consumer sentiment.

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“On top of that, increased clearance in stores has led to a reduction in gross margin, and we have also had some unforeseen delays in our new store openings and upsizes.

“However, we have continued our programme of investment, both in upsizing our stores and in our digital capabilities, and are working hard on a number of initiatives to maximise the company's performance during the upcoming peak trading period.”

Footasylum expects to report revenue of £98.6m for the six months to 25 August, an increase of 18.5 per cent.

PA

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