Dr Martens: Profit dives as boot maker continues to feel the pain from lagging US market
Iconic British boot maker Dr Martens has reported a 42.9 per cent decline in profit before tax for its year to 31 March.
On Thursday, the 60-year-old brand blamed weak consumer demand in the US for the puncture in its earnings.
America is one of the business’s biggest markets, but it has faced a number of challenges in the region, including the hangover from bottleneck issues in its Los Angeles warehouse.
In the country, revenue declined 24 per cent to £325m due to shoppers holding off on buying the pricey shoes and issues with wholesale.
Dr Martens said it doesn’t expect to see recovery in its US market until the autumn seasons of 2025.
Across the whole of the group, profit before tax fell by 42 per cent on last year’s figure to £97.2m, while revenue slipped 12 per cent to £887m.
It is a hefty drop from last year when it broke the £1bn barrier for the first time.
It comes as the departure of chief Kenny Wilson looms over the company.
The Aberdonian will step down after six years and be replaced by the business’s chief brand officer, Ije Nwokorie.
Nwokorie – who joined as a non-executive director- will now be tasked with steering the ship.
WIlson said: “Our FY24 results were as expected and reflect continued weak USA consumer demand. This particularly impacted our USA wholesale business and offset our group DTC performance, where pairs grew by seven per cent. We have achieved robust performances in EMEA and APAC, and our supply chain strategy continues to deliver good savings.”
“We are clear that we need to drive demand in the USA to return to growth in FY26 onwards and are executing a detailed plan to achieve this, with refocused and increased USA marketing investment in the year ahead.
He added: “We are also announcing a cost action plan across the group, targeting savings of £20m to £25m. I am confident that the actions we are taking as we enter this year of transition will put us in good shape for the years ahead.”
Shares in the company rose by over five per cent in early trade.
Adam Vettese, analyst at investment platform eToro, said: “This has been another update that makes grim reading for Dr Martens, with revenues declining and US sales once again a weak spot. The firm has announced a raft of cost cutting measures and it seems they do need to pull themselves up by the bootstraps to get out of this financial quagmire.
“The new CFO is targeting savings of £20-25m news of which is being well received by the market this morning. This morning’s bid however is a drop in the ocean, given that the shares have pretty much been on the decline since the IPO in 2021.”
He added: “Consumers have been under pressure in this higher inflation environment and with their punchy ticket price, a pair of Docs is probably one of the first luxuries to make way. The numbers would back this up.”