Dr. Martens posts negative results driven by weak US consumer demand

In a preliminary results announcement for the full year, Dr. Martens reported revenue decline of 12 percent or 10 percent in constant currency, with DTC revenue up 2 percent or 5 percent constant currency offset by wholesale revenue down 28 percent or 26 percent constant currency driven by USA wholesale.

For the first half, the company expects a revenue decline of around 20 percent, driven by wholesale revenues down around a third. The company said that overall results this year are expected to be very second-half weighted, particularly from a profit perspective.

“Our FY24 results were as expected and reflect continued weak USA consumer demand. This particularly impacted our USA wholesale business and offset our group DTC performance, where pairs grew by 7 percent,” said Kenny Wilson, chief executive officer of Dr. Martens.

Within DTC, retail revenue was up 6 percent or 10 percent constant currency and ecommerce was down 1 percent reported and up 1 percent on a constant currency basis.

By region, EMEA revenue was down 3 percent with 12 percent growth in DTC offset by wholesale decline, driven predominantly by the planned strategic decision to reduce volumes into EMEA etailers.

The Americas revenue declined 24 percent or 20 percent constant currency driven by wholesale. APAC revenue was down 7 percent or up 1 percent in constant currency driven by growth in Japan.

‘We are clear that we need to drive demand in the US to return to growth…’

The company witnessed strong performance in shoes and sandals, with DTC pairs in both categories growing over 20 percent showing the continued strength of the brand.

Dr. Martens opened 35 net new stores globally, with the majority of these being in continental Europe and APAC.

The company added that gross margins for the year increased 3.8 percentage pts to 65.6 percent, profit before tax of 97.2 million pounds, was down 43 percent driven by the decline in EBITDA together with increased depreciation & amortisation.

The company’s board has proposed a final dividend of 0.99p, taking the total dividend to 2.55p, equating to a 35 percent earnings payout. The board intends to hold the FY25 dividend flat in absolute terms, before returning to an earnings payout in line with the dividend policy of 25 percent to 35 percent payout in FY26 onwards.

“We are clear that we need to drive demand in the US to return to growth in FY26 onwards and are executing a detailed plan to achieve this, with refocused and increased USA marketing investment in the year ahead. We are also announcing a cost action plan across the group, targeting savings of 20 million to 25 million pounds,” added Wilson.