Dr Martens set for plunge in profit as US business stumbles

24 May 2024, 12:44

Dr Martens shop
Dr Martens shop. Picture: PA

The Northamptonshire-based bootmaker said last month that orders for items in its autumn/winter collection were ‘significantly down’ on last year.

Bootmaker Dr Martens is expected to post tumbling profit and revenue amid weakness in the US, its biggest market.

The London-listed firm’s turnover is predicted to come in at less than £900 million, an 11% drop from last year when it broke the £1 billion barrier for the first time.

The company will announce full-year results on May 30.

Dr Martens has suffered from falling wholesale revenue of late, with double-digit declines in the US in its last trading update in April.

It said last month that orders for items in its autumn/winter collection were “significantly down” against last year.

Analysts are looking for operating profit of £125 million, which would be a more than one-third fall on last year.

The situation could be compounded or improved by the planned change of chief executive, after Kenny Wilson announced last month that he would step down.

Mr Wilson, who has been in charge for six years, said at the time: “The full-year 2025 outlook is challenging, and the whole organisation is focused on our action plan to reignite boots demand, particularly in the USA, our largest market.”

He will be replaced in the role by Ije Nwokorie, who is currently chief brand officer at the business, before the end of the current financial year.

He was previously senior director for Apple Retail as well as chief executive of brand consultancy Wolff Olins.

Dr Martens’s share price was down 81% on Friday versus its 450p listing price on the FTSE 250 in 2021.

Derren Nathan, head of equity research at Hargreaves Lansdown, said: “Dr Martens’s shareholders are nursing heavy losses and weakness in the US, its biggest market, continues to be a concern.

“The iconic bootmaker has outlined several challenges for this year. It’s anticipating another double-digit decline in US wholesale revenue.

“The decision to hold back on price increases means the company will be unable to offset inflation.

“Dr Martens sees a potential two-thirds fall in pre-tax profits as the worst-case scenario but has not ruled out the possibility of an improvement. Markets will be watching out for further guidance.”

By Press Association