Dr Martens Shares Up Despite Lowering Profit Guidance

Dr Martens (LON: DOCS) shares regained some of their early losses Friday, with the stock initially falling after it lowered its profit guidance for the second time in four months.

The company explained that it took action to tackle operational issues at its LA distribution centre (DC), and shipments are now back to normal levels. However, the costs of resolving the issues were £15 million, higher than the £8 million to £11 million expected initial estimates. With softer fourth quarter wholesale revenue, it has resulted in DOCS now expecting EBITDA for the year to be around £245 million, down from the previous range of £250 million to £260 million.

DOCS is currently up 5% on the day at 148.8p per share after initially hitting a low of 130p.

Fourth quarter total revenue grew 6%, driven by overall solid direct-to-consumer trading, the company stated. However, wholesale was down 4%. For the full year, revenue growth was 10%.

DOCS added that it has made good progress on resolving the operational issues at its LA distribution centre, with the company opening three temporary warehouses to release excess shipping containers and store stock away from the LA DC. As a result, As a result, shipment volumes at the DC are now back to normal levels.

The company maintained FY24 revenue growth guidance of mid to high single digits on a constant currency basis.

As of March 31, DOCS had cash of around £158 million and inventory of approximately £258 million.

In a separate announcement on Friday, the company said Jon Mortimore has decided to retire as Chief Financial Officer (CFO) of the company.