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US market drags down Dr. Martens full year results

May 31, 2024 United Kingdom
US market drags down Dr. Martens full year results
As expected, the weak performance of the US wholesale business largely offset the positive performance of Dr. Martens’ DTC business and contributed to a poor full year result
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%. We have achieved robust performances in EMEA and APAC, and our supply chain strategy continues to deliver good savings”, commented Kenny Wilson, Chief Executive Officer.

Full Year 2024 Results

Dr. Martens reported a 12% (or 10% on a constant currency basis) decline in sales to 877.1 million British pounds (1.03 billion euros) in the year to March, on a comparable basis to last year.

The wholesale sales contributed 344.0 million British pounds (403.4 million euros) to the company’s total revenue in the financial year 2024, reflecting a year-on-year decrease of 28.3% (or 26% on a constant currency basis), as compared to the previous year. The decline was due to the impact of “strategic decisions to reduce volumes into EMEA e-tailers and cease the distributor contract in China”, and, above all, “very weak wholesale orders in the USA due to widespread caution from wholesale customers”.

In contrast, full year DTC sales increased by 2.4% to 533.1 million British pounds (625.2 million euros). Within this channel, e-commerce sales of 276.3 million British pounds (324.0 million euros) were down by 1.0% (up by 1.0% on a constant currency basis), with growth in all regions except the US, and retail sales increased by 6.2% (or 9.5% on a constant currency basis) to 256.8 million British pounds (301.2 million euros), with the continued recovery in footfall in EMEA and APAC offset by a decline in footfall in the US.

The company’s EBITDA for the full year totalled 197.5 million British pounds (231.6 million euros), decreasing by 19.4% from the previous year, and the EBITDA gross margin slipped to 22.5% from 24.5%. In addition, increased depreciation and amortisation expenses further squeezed profits. As a result, profit before tax dropped by 42.9% year-on-year to 97.2 million British pounds (114.0 million euros.

Dr. Martens then reported a profit of 69.2 million British pounds (81.2 million euros) over the financial year 2024, a significant decrease of 46.3%, as compared to the profit of 128.9 million British pounds (151.2 million euros) recorded in the prior year.   


Outlook

Looking ahead, “We are clear that we need to drive demand in the USA 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 £20m (23.5m euros) to £25m (29.3m euros)”, concluded Wilson.

1GPB = 1.17 EUR


Image Credits: ffxnow.com


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