Dr. Martens has issued another profit warning, leading to a decrease in its shares. The British footwear and clothing brand cited a slower-than-anticipated recovery in the U.S. market and revised its fiscal 2024 target.
Share Price Decline
As of 1114 GMT, Dr. Martens’ shares were down 31.6 pence or 28%, reaching 83.2 pence. Year-to-date, the shares have experienced a significant decline of 56%.
Revenue Expectations
For the fiscal year ending in March, Dr. Martens predicts a high single-digit percentage decrease in revenue compared to the £1.0 billion ($1.27 billion) reported in fiscal 2023. This decrease is anticipated to result in earnings before interest, taxes, depreciation, and amortization falling moderately below the company’s initially forecasted market range of £223.7 million to £240 million.
Impact on Pretax Profit
The profit warning also indicates that pretax profit will face a £5 million setback. According to the company’s market estimates, pretax profit for fiscal 2024 is projected to be between £128.7 million and £148.0 million.
Underperformance in the U.S. Market
Dr. Martens attributes the downward revision to a weaker first-half performance and mixed trading in the second half, largely due to underperformance in the U.S. market. CEO Kenny Wilson emphasized that despite these challenges, the U.S. market remains a top priority.
Efforts to Reignite the Boots Trend
To counter these setbacks, Dr. Martens has implemented strategies to revive the boots trend in the U.S. market. It plans to achieve this through marketing initiatives, product innovation, and a newly appointed leadership team. Wilson commented, “We significantly upgraded the caliber of the team in the U.S.”
Medium-Term Targets Unchanged
While the company has withdrawn its previous guidance of high single-digit revenue growth in fiscal 2025, its medium-term targets remain unaffected.