- Footwear retailer Footasylum warned Tuesday adjusted earnings would be toward the lower end of market expectations as it planned to cut costs in a bid to improve margins amid 'challenging' UK high street trading conditions.

Footasylum now expected to report adjusted earnings (EBITDA) for 2019 towards the lower end of the current range of analyst forecasts, the company said.

The weaker outlook comes as the company said it would be implementing a cost reduction plan across the business, which may result in some exceptional costs in full-year, as it sought to boost gross margins, which were expected to fall short of market expectations.

Revenue growth, however, was expected to meet current expectations.

The company blamed the weaker outlook on margins on higher-than-expected levels of promotional and clearance activity.

For the 18 weeks ended 29 December 2018, total revenue was up 14% to £102.3m, and up 16% year-to-date to £200.8m. Wholesale revenue doubled from £1.3m to £2.6m.

Online sales were up 28% to £36.0m, and on a year-to-date basis now accounted for 33% of total revenue, up from 30% in the comparative period, the company said. Five new store openings and three upsizes were completed ahead of Christmas, the company confirmed. 'The current trading conditions have led to significant discounting and promotional activity across the sector, and this in turn has impacted our gross margin expectations for FY19,' said Barry Bown, Executive Chairman of Footasylum.

At 8:08am: [LON:FOOT] Footasylum Plc Ord Gbp0.001 share price was -6.5p at 26p

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