Dr Martens shares rocket after kicking down costs
Dr Martens shares rocketed in early morning trading on Tuesday, after sharp cost-cutting across the business delivered significant profit growth.
Shares in the shoemaker soared 8.5 per cent in early trading to 69.8p, with shares up 22.1 per cent over the last year, following its latest annual results.
But the share price remains down 7.4 per cent since January, as shareholders awaited progress of its turnaround plan.
The iconic boot producer reported a 270 per cent rise in its pre-tax profit for the year to end March, hitting £32.7m, up from £8.8m the prior financial year.
This followed a fall in supply chain costs, with the cost of sales falling £17m to £258.9m, off the back of savings on global ocean freight rates, which is the price charged by transport providers.
The cost savings helped offset an anticipated 2.8 per cent fall in revenue from £787.6m to £764.9m.
The drop was in line with targets set out in its strategy to ultimately increase the quality of revenue by ending its reliance on clearance and discounted sales activity.
Shoe sales were up 19 per cent, amid returning demand for its core products and a shift towards full-price sales.
The company maintained its dividend at 2.5p per share.
Regional performance
The performance in the US contributed to overall growth, as the region continued to recover from previous weak demand and consumer business, ending its reliance on discounted sales.
The Europe and Middle Eastern market continued to feel pressure, with revenue falling 1.7 per cent to £377.5m, after wholesale activity was offset by customers clinging to clearance sales, in particular in the UK, leading to fall in sales.
The Asia Pacific region also reported a 5.1 per cent fall in revenue to £109m, with after growth in China and South Korea was damaged by a 8.9 per cent fall in online sales.
Turnaround plan progressing
The FTSE 250 company will continue to kick up its turnaround plan, through increasing investment into the company.
Ije Nwokorie, chief executive officer, said: “We will lean in with increased investment in the brand and targeted retail store upgrades, as well as continuing to build strong wholesale partner relationships to support demand at scale.
With the operating model reset… our business is now well set up to deliver both our FY27 objectives and medium‑term targets.”
Nwokorie noted collaborators, including new designers and brands, are flocking back to the shoemaker while consumers are responding positively to new products and an incoming new London store.