Dr. Martens Shares Slide Despite Signs of Strategic Progress

Dr. Martens plc (LON: DOCS) shares fell over 3% Thursday morning after the company released its first-half results for the 26 weeks ended September 28, 2025, revealing progress in its strategic shift towards a consumer-first approach.

Despite a volatile market, the company is demonstrating financial improvements and remains confident in its plans for the year.

Group revenue reached £322 million, up 0.8% on a constant currency (CC) basis. Full Price Direct to Consumer (DTC) revenue saw a 6% increase, reflecting a focus on improving revenue quality by reducing clearance activity. Adjusted loss before tax (PBT) significantly improved to a £9.2 million loss CC, compared to a £16.6 million loss in H1 FY25.

The company's balance sheet showed strength, with net bank debt (excluding leases) down to £154.3 million from £186.8 million the previous year, driven by strong cash performance. An interim dividend of 0.85p per share was declared, aligning with their policy of one-third of the prior year's total dividend.

The dividend, maintained despite challenging conditions, signals confidence in the long-term financial health. Reduction of net debt indicates improved financial stability and provides flexibility for future investments. The focus on full-price sales is a strategic move to enhance brand value and profitability, although it may constrain near-term revenue growth.

Driver Breakdown

• Consumer Focus: 6% growth in Full Price DTC revenue signals success in reducing clearance activity.
• Product Innovation: A 33% increase in shoe volumes indicates a positive response to new product launches like the Zebzag Laceless and 1460 Rain boots.
• Global Partnerships: Expanded distribution partnerships in Latin America, Italy, UAE, and the Philippines extend market reach.

CEO Ije Nwokorie stated, “We're pivoting from a channel-first to a consumer-first strategy… we are happy with the advances we're making and are seeing green shoots across each of our four Levers for Growth,” reinforcing the company's strategic focus.

Dr. Martens anticipates a high single-digit £m headwind from increased USA tariffs for FY26. Mitigation efforts are expected to offset roughly half of this impact.

Based on current spot rates, currency impacts are projected to result in approximately a £10m headwind to Group revenue and a £2m benefit to Adjusted PBT. The company remains comfortable in achieving the sell-side Adjusted PBT consensus range of £53m to £60m, excluding any impact from tariffs.