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Dr. Martens Shares Plunge: Withholds Guidance After Weak Half

Dr. Martens gave no full-year target after a weak first half, warning of a wide range of outcomes for the year as boot sales fell 20% in a hot summer. The shares hit a new 52-week low.

Dr. Martens (LON: DOCS), the boot and shoe maker, gave no full-year profit target today after first-half revenue fell 9.2% at constant currency, and its shares dropped about 15%. Constant currency strips out exchange-rate effects.

The shares stood at 53.9p at 8.45am, a delayed quote with the market open, down 9.5p from yesterday’s 63.4p close. That is a new 52-week low, below the previous 57.90p, and about 39% under the 88.5p close of the 13th of August.

DOCS.LSE

The results, for the 26 weeks to the 27th of September, showed revenue of £290.4m against £322.0m a year earlier. Boots revenue fell 20%, to 44% of sales from 49%, while UK revenue fell 21.3%. The adjusted pre-tax loss, before one-off items, widened to £13.7m from £9.4m.

The weakness in boots combined with the impact of the planned critical changes to our DTC proposition means that the H1 performance we’re announcing today is disappointing, with Group revenue down 9% CC.

Ije Nwokorie, Chief Executive Officer, Dr. Martens

The slide worsened through the half. Revenue rose 3.4% in the first quarter but fell 15.8% in the second. September was very weak, and October, though better, was still down at a mid-teens rate.

The company said there is “a wide range of outcomes in both revenue and PBT terms” for the year, where PBT means pre-tax profit. It restated analyst consensus of £777m revenue and £65.7m adjusted pre-tax profit without endorsing either.

Line chart of Dr. Martens' share price from August to 12 November, drifting lower before falling sharply on results day
Dr. Martens shares drifted from the August high to 63.4p before results, then fell sharply on the day (12 November is a delayed 8.45am quote)

On our arithmetic, £777m implies second-half revenue of about £486.6m, roughly 10% above the £442.9m of the same period last year. That needs a sharp turn from a business still shrinking in October.

Cash fell to £91.1m from £180.3m in March, and net leverage was 2.2 times against a lender covenant limit of 3 times. The company said Black Friday, Christmas and the post-Christmas sales are crucial for the full-year outcome.

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