- ‘Levers For Growth’ well-received
- Return to profit growth expected
- Americas DTC back in growth
Dr Martens (DOCS) was the FTSE 250’s biggest gainer early doors on 5 June, shares stomping 20% higher to 71.2p as investors welcomed the launch of a new ‘Levers For Growth’ strategy to establish the iconic brand as the most-desired in global premium footwear.
Led by new broom Ije Nwokorie, the British bootmaker guided for a return to profit growth in the current financial year, hailed a return to direct-to-consumer growth in the Americas and highlighted the ‘significant’ untapped market opportunity ahead for the brand.
PROFITS KICKED LOWER
Adjusted pre-tax profit plunged 65% to £34.1 million in a difficult year ended 30 March 2025 on a 10% drop in group sales to £787.6 million, which reflected a ‘challenging macroeconomic and consumer backdrop’ in several of Dr Martens’ core markets.
However, the boot, shoe and sandal seller has already delivered £25 million of annualised cost savings, meeting the top end of guidance, while inventory and leverage levels have been brought to heel.
Year-end inventory was down £67.2 million to £187.4 million, while net debt including leases reduced by £110.3 million to £249.5 million.
STABLE FOOTING
Having stabilised the business, management sees a ‘significant untapped market opportunity’ ahead for the beloved British brand.
‘Our single focus in full-year 2025 was to bring stability back to Dr Martens,’ explained new chief executive Nwokorie.
‘We have achieved this by returning our direct-to-consumer channel in the Americas back to growth, resetting our marketing approach to focus relentlessly on our products, delivering cost savings, and significantly strengthening our balance sheet.’
Nwokorie said the new strategy would increase Dr Martens’ opportunities ‘by shifting the business from a channel-first to a consumer-first mindset. We will give more people more reasons to buy more of our products, whether that’s our iconic boots and shoes, newer product families such as Zebzag and Buzz, or adjacent categories such as sandals, bags and leather goods.’
ON THE FRONT FOOT
Russ Mould, investment director at AJ Bell, commented: ‘Dr Martens is on the front foot with a strategy that seeks to kick out the troubles of old and return the business to profitable growth. This should shift the market’s focus from earlier problems in the US and a sharp drop in earnings to a business intent on regaining its power.
‘Having a plan is a good start, but the proof will be in the execution. It has laid out ambitions to get back on top. Turning those dreams into reality might not be easy.’
Mould added: ‘Dr Martens needs to convince the consumer they need its products - get that right, and it could reclaim its crown in the footwear market. The brand still has considerable strength, the business just needs to be more creative at the front end and agile at the back end.’
Begbies Traynor’s (BEG:AIM) Julie Palmer said: ‘Whilst Dr. Martens will be looking to kick-on, patience will be required. Dr. Martens might claim to have brought stability to the business this year with a strengthened balance sheet, but sentiment in both the US and UK remains precarious as shoppers and the brand weigh up the impact and actions from President Trump’s tariffs.’
DISCLAIMER: Financial services company AJ Bell referenced in this article owns Shares magazine. The author of this article (James Crux) and the editor (Ian Conway) own shares in AJ Bell.
