Dr Martens faces a significant drop in profits, prompting the implementation of cost-saving strategies.
- Profits after tax shrank by 46.3% to £69.2 million, marking a challenging year for Dr Martens.
- Revenue decreased by 12.3% to £877.1 million, impacted by weak consumer demand in the US.
- Direct-to-consumer sales rose significantly, even as wholesale revenue fell by 28%.
- The company plans a strategic push to reignite US demand and announces leadership changes.
Dr Martens has reported a substantial reduction in profits after tax, registering a 46.3% decrease to £69.2 million for the year ending 31 March 2024. This downturn reflects broader challenges the company faces amidst shifting market dynamics. The footwear brand experienced a revenue decline of 12.3%, totalling £877.1 million. The reduction is attributed largely to ongoing weak consumer demand within the United States.
The company’s EBITDA also fell by 19.4% year-on-year to £197.5 million, which was expected by the firm. This decrease was due to increased depreciation and amortisation charges, driven by continued investment in new stores and IT projects, along with higher-rate interest costs. Such statistical drops underscore the financial pressures experienced by the company as it navigates through this competitive landscape.
While wholesale revenue saw a precipitous 28% decline, primarily due to the US market, Dr Martens recorded a notable increase in direct-to-consumer transactions. Sales through the brand’s own stores and websites grew by 9%, comprising 62% of the total sales. This growth is largely attributed to the strong performance in shoes and sandals, with each category reporting over 20% year-on-year growth.
The company opened 35 net new stores globally, with significant expansions across continental Europe and the Asia-Pacific region. These strategic expansions are reflective of Dr Martens’ efforts to strengthen its direct sales channels amidst declining wholesale performance. Outgoing CEO Kenny Wilson affirmed the effectiveness of their supply chain strategy, which continues to yield savings.
Looking forward, Dr Martens plans to focus on revitalising demand in the US to steer back to growth by 2025/26. They are preparing a detailed strategy, including increased marketing investments. Concurrently, a cost-saving initiative aiming to secure savings between £20 million to £25 million has been announced. Leadership transitions are also underway, with Ije Nwokorie set to succeed Kenny Wilson at the end of the financial year.
Dr Martens is strategically navigating through financial challenges with cost-saving measures and a refocused market strategy.
