Dr Martens has issued a profit warning as it said ongoing problems with its US business “will take longer” to fix than first thought.
For the six months to September 30, 2023, Dr Martens reported a 55% drop in profit before tax to £25.8m, a 13% fall in EBITDA to £77.6m and a 5% reduction in revenues to £395.8m.
The retailer said that it expected full-year revenue to decline and full-year EBITDA to be “moderately below the bottom end of the range of consensus expectations”.
“The most challenging part within our US business is wholesale, with widespread macro-economic caution amongst our wholesale customers resulting in a weaker order book than in prior years,” it added.
Dr Martens also launched its authorised repair service for UK customers in October.
Chief executive Kenny Wilson said: “We saw a mixed trading performance in the first half of the year. We made good progress with our strategic priorities, continuing to invest in the business and our people to drive sustainable long-term growth.
“During the period, we focused on controlling the controllables: we delivered significant supply chain savings, successfully transformed our North America distribution network, opened 25 new stores and launched a Dr Martens UK repair service. The DOCS strategy [which stands for DTC first, Organisational and Operational Excellence, Consumer Connection and Support Brand Expansion with B2B] of brand control and prioritising more profitable sales via our own stores and websites continued to deliver, with DTC revenues up 11% in constant currency, representing half of group revenues.
“We saw a continued strong DTC performance in EMEA and APAC. In the US, where there is an increasingly difficult consumer environment, our results have been more challenged, led by weakness in wholesale.
“We have strengthened the Americas leadership team and they are taking action, including refocusing marketing and improving our ecommerce trading capabilities. It is likely, however, that given the challenging backdrop, it will take longer to see an improvement in US results than initially anticipated.
“Notwithstanding the clear challenges we face in the US market, we remain very confident in our iconic brand and the significant growth opportunity ahead of us.
“I am delighted that I’ll be joined by Giles Wilson as chief financial officer and Ije Nwokorie as chief brand officer in the new year, bolstering our leadership team.
“I would like to take this opportunity to thank the dedicated and passionate people of Dr Martens for their exceptional hard work in H1 and their continued support as we enter the busiest period of the year.”
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