- Low wholesale demand
- CFO to retire
Dr Martens (DOCS) has issued another profit warning after lowering its forecasts just three months ago. The boot maker expects Ebitda for the year ended 31 March 2023 to be around £245mn. This compares with January’s downgraded estimates of £250-260mn, and implies a year-on-year fall in profits of 7 per cent. However, its share price rose 8 per cent on the news, plus changes in the management team.
Management blamed operational issues at its new distribution centre in LA and softer wholesale revenue in the fourth quarter of the year. Total incremental costs associated with the distribution centre were around £15mn, significantly higher than the £8-11mn expected initially, due mainly to high container costs.
In total, revenue increased by 4 per cent on a constant currency basis over the year, driven by strong direct-to-consumer trading, which grew by 13 per cent. In-person shopping proved particularly popular, with sales up by 25 per cent. In contrast, e-commerce grew by just 1 per cent. Geography also played a part. While there was strong direct-to-consumer growth in EMEA and Apac, conditions remained “soft” in America.
Management has guided for revenue growth of “mid to high single digits” in financial year 2024, but thinks incremental costs associated with the LA distribution centre will remain high at £15mn.
Dr Martens also announced the retirement of its chief financial officer, Jon Mortimore, who has been at the company for seven years. A replacement has yet to be found.
