Dr Martens shares plunged to new lows as the British bootmaker warned of poor profits and performance in the US and announced the resignation of its chief executive.
The brand, known for its platform boots with yellow stitching, has warned that sales for the year to the end of March 2025 will fall by a single digit percentage compared to the previous year. In the worst-case scenario, pre-tax profits could be just a third of last year’s £159m.
This is the latest in a series of profit warnings for the brand, which has issued four profit warnings in the last year, and saw its shares fall by a third to a record low of 62p on Tuesday.
The company expects U.S. wholesale revenue (for shoes sold in-store and through other retailers) to decline by double digits, with fall/winter sales accounting for the majority of U.S. sales in the second half of the year. The company explained that its order backlog has decreased significantly compared to the previous year. Year. This will take a £20m hit to pre-tax profits, with a further £35m hit from wage and other cost pressures.
“No further price increases are expected this year, so we will not be able to offset cost inflation this year as in previous years,” Dr Martens said.
Peel Hunt analysts said that while the warning was not surprising, “the scale of the impact is much larger than feared.”
CEO Kenny Wilson will step down at the end of the financial year after six years at the helm, and will be replaced by Ije Nwokolie, who served as chief brand officer last year and previously served as chief brand officer. takes office. Senior Director of Apple Retail.
Mr Wilson described the outlook as “difficult” and added: “The entire organization is focused on an action plan to reignite demand for boots, especially in the United States, which is our largest market.The nature of our wholesale business in the United States means that once our customers gain confidence in the market, we results will significantly improve, but we do not expect this to occur in the United States. [current] fiscal year. ”
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The boots were first created in 1945 by a young German military doctor, Klaus Mertens. He designed an air-cushioned sole to aid recovery from a broken foot. It debuted in the UK in 1960, when a Northamptonshire shoemaker began production. Its rugged design made it popular with postmen and factory workers, and later on skinheads and punks. Dr. Martens is the mainstream boot manufacturer these days.
