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Dr. Martens lowers full year profit guidance

Apr 20, 2023 United Kingdom
Dr. Martens lowers full year profit guidance
The iconic British brand has lowered its FY 23 profit outlook due to costs associated with resolving operational issues at its LA distribution centre, as well as a decline in wholesale revenue
“We took decisive action to tackle the operational issues at our LA DC with shipments now back to normal levels. However, costs associated with resolving these issues were higher than our initial estimates which, in conjunction with softer Q4 wholesale revenue, means we expect EBITDA for the year to be around 245 million British pounds. We continue to adopt a custodian mindset, taking decisions in the best long-term interests of all our stakeholders, and I believe firmly in the DOCS strategy, the continued strength of the Dr. Martens brand and the medium to long-term growth potential of the business”, commented Kenny Wilson, Chief Executive Officer of Dr. Martens in the company’s latest trading update.

Trading Update

Concerning the last quarter of fiscal 2023, the company advanced that its revenue increased by 6% (flat in constant currency), as compared to the same period of last fiscal year, due to the strong direct-to-consumer (DTC) growth in the EMEA and APAC regions, partially offset by the “soft” performance of this channel in America.

Overall, in the three months to the 31st of March, Dr. Martens' DTC revenue grew by 20% (by 13% in constant currency), while its wholesale revenue was down by 4% (down by 11% in constant currency), mainly thanks to the operational issues in the LA distribution centre. Furthermore, within DTC, retail revenue rose by 36% (by 28% in constant currency) and e-commerce revenue was up by 6% (by 1% in constant currency).

The UK-based company also reported that its annual revenue increased by 10% (by 4% in constant currency), with the DTC channel growing by 16% (by 11% in constant currency) and the wholesale revenue rising by 4% (down by 3% in constant currency), on a comparable basis to the prior year. Within DTC, retail sales were up by 30% (by 25% in constant currency) and e-commerce sales grew by 6% (by 1% in constant currency).

Dr. Martens added as well that it reduced its full year EBITDA guidance to around 245 million British pounds (271 million euros) due to higher costs associated with resolving operational issues at the LA distribution centre, together with a decline in the wholesale revenue.


CFO retirement

On a separate note, it was announced that Jon Mortimore decided will retire from his role as Chief Financial Officer (CFO). He will remain in the position until a successor is found.

Dr. Martens said that Mortimore, who joined the company in April 2016, “has been instrumental in delivering the Company's transition from a family-run company to a listed PLC, overseeing revenue growth from 230 million British pounds (261.1 million euros) to 1 billion British pounds (1.13 billion euros), as well as playing an integral role in the Company's initial public offering (IPO) in January 2021”.


1 British Pound = 1.14 euros

Image Credits: nakdseoul.kr

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