Dr Martens PLC on Thursday said it will cut costs while at the same time invest in marketing to revive its flagging US business, as the boot maker revealed a drop in annual revenue and profit.
Dr Martens shares were up 4.6% at 87.78 pence on Thursday morning in London, outperforming the wider FTSE 250 index, which was up 0.4%.
The London-based company said pretax profit fell by 42% to £93.0 million in the financial year that ended March 31 from £159.4 million the year before. Before currency effects, pretax profit fell 43% to £97.2 million from £170.1 million.
Revenue was £877.1 million, down 12% from £1.00 billion. It was down 9.8% at constant currency rates. The company sold 11.5 million pairs of its iconic boots, down 17% from 13.8 million in financial 2023.
Dr Martens said financial 2024 was a ‘challenging year’ for the company, with a difficult trading environment.
This was particularly true in the US, where revenue fell by 24%, or 20% at constant currency, primarily due to weak wholesale business. In Europe, Middle East and Africa, revenue was down 3%, while in Asia Pacific, it was down 7% at actual currency rates and up 1% at constant currency.
Globally, wholesale revenue was down 28%, or 26% at constant currency, swamping a 2% - or 5% - rise in direct-to-consumer revenue.
Looking ahead to financial 2025, Dr Martens said: ‘There remains a wide range of potential outcomes for both revenue and profit for the year, dependent on the performance through the key peak trading period.
‘For the first half, we expect a group revenue decline of around 20%, driven by wholesale revenues down around a third. Combined with the cost headwinds which impact both halves, the impact of operational deleverage is significantly more pronounced in the first half. Overall results this year will therefore be very second-half weighted, particularly from a profit perspective.’
Dr Martens declared a final dividend of 0.99p, taking the total dividend to 2.55p, down from 5.84p. It said it plans to pay the same again in financial 2025 before returning to its normal dividend policy of 25% to 35% of earnings from financial 2026 onwards.
Dr Martens announced a ‘cost action plan’ to cut £20 million to £25 million in annual costs across the company. This will be led by its new chief financial officer, Giles Wilson.
At the same time, the company plans to invest in marketing to rebuild its US business.
‘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,’ said Chief Executive Officer Kenny Wilson.
Wilson is set to be replaced as CEO this year by Ije Nwokorie, currently chief brand officer.
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