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Dr. Martens Revenue, Profit Tumbles on Continued Weak USA Demand

Sam Boughedda trader
Updated 30 May 2024

Dr. Martens (LON: DOCS) reported a significant decline in revenue and profit for the fiscal year ending March 31, 2024, primarily driven by weak consumer demand in the USA.

Dr Martens boots

YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY.


The company's revenue dropped by 12.3% year-over-year to £877.1 million, while profit before tax plummeted 42.9% to £97.2 million.

CEO Kenny Wilson attributed the disappointing results to poor performance in the USA wholesale business, which overshadowed positive growth in direct-to-consumer (DTC) channels. Despite a 7% increase in DTC pairs, wholesale revenue in the Americas fell by 24%, causing a substantial impact on overall performance.

Regionally, EMEA saw a modest 3% revenue decline, with a 12% rise in DTC offset by reduced wholesale volumes. APAC remained stable with a slight 1% growth in constant currency terms, buoyed by strong sales in Japan.

The company's strategic focus includes a detailed plan to boost demand in the USA, with increased marketing investment set for the upcoming year. Additionally, a cost-saving initiative targeting £20-25 million is underway to improve financial stability.

Other notable achievements included robust growth in shoes and sandals, a 3.8 percentage point increase in gross margins, and the opening of 35 new stores globally, predominantly in Europe and APAC. However, net debt rose to £357.5 million due to returns to shareholders and increased lease liabilities.

Looking ahead, Dr. Martens said current trading is in line with its expectations. For the first half, they expect a revenue decline of around 20%, driven by wholesale revenues down around a third.

Overall results this year are forecast to be “very second-half weighted, particularly from a profit perspective.”

Furthermore, the company plans to maintain the FY25 dividend at current levels, with an anticipated return to a standard earnings payout in FY26.

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YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY


YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY.


Sam is a trader and lead stock market writer at AskTraders. After starting his career in the forex market, Sam now focuses on stocks, specifically consumer staples.