Dr Martens reports further drop in sales for Q3

Dr Martens has reported Q3 revenue down by a fifth, driven by weak sales in the US market.

Group revenue for the three months to 31 December 2023 totalled £267.1m, a decline of 21% year-on-year.

Sales in Europe were impacted by abnormally warm weather conditions in the autumn, and in the Americas revenue fell by 31% due to weak consumer spending. 

In November, the bootmaker issued a profit warning for the full year and revised its expectations for full-year revenue to a high single-digit percentage decrease compared to the previous year.

The company confirmed on Thursday that it was sticking to this guidance.

Chief executive Kenny Wilson said that trading in the third quarter was “volatile”.

“Whilst the consumer environment remains challenging, we are taking action to continue to grow our iconic brand and invest in our business,” he added.

Dr. Martens issues profit warning after US distribution problems

British footwear manufacturer Dr. Martens plc has lowered its profit guidance for the third time in five months as operational issues at its new Los Angeles distribution centre continued to impact earnings.

It now expects EBITDA for its latest financial year to be around £245m.

The company opened three temporary warehouses to help resolve bottleneck issues at the LA facility.

Revenue for the full year was up 10% with Q4 up 6%. In constant currency, full-year revenue grew by 4% and Q4 was level with last year.

Wholesale revenue declined by 4% in the fourth quarter, and by 11% in constant currency.

“We took decisive action to tackle the operational issues at our LA DC with shipments now back to normal levels,” said CEO Kenny Wilson.

“However, costs associated with resolving these issues were higher than our initial estimates which, in conjunction with softer Q4 wholesale revenue, means we expect EBITDA for the year to be around £245m.”

Looking ahead, Dr. Martens is sticking with its guidance for revenue growth of “mid to high single digits” on a constant currency basis in FY24.

As in FY23, incremental costs associated with the LA DC are expected to be approximately £15m as the company now plans to maintain temporary warehouses for the full year, offset partly by lower year-on-year container and handling costs.

Dr Martens put up for sale

Classic British boot and shoemaker, Dr Martens, has been put up for sale by R Griggs Group.

The family owned boot and shoemaker is set to fetch as much as 120m.

The company have been making Dr Martens for over 50 years, and saw a impressive resurgence over the past few years.

Favoured by punks, Goths and skinheads, R Griggs made a robust pre-tax profit of £15.3 million, up from £5m the previous year. Sales also grew to £110.2m from £82.9m as the group also open more stores in the US, which accounts for 42 per cent of sales.

The fashionable footwear brand, began as standard boots for the German army after WW2, but design rights were brought by Max Griggs father.

The first eight-eyelet boot – with its distinctive yellow welt stitching and famous black and yellow heel loop – entered production in the UK in 1960.

A slump in 2000 saw the British manufacturer move production to China and Thailand. But R Griggs reopened the brand’s original factory at Wollaston, in Northamptonshire, in 2007 to produce vintage styles of the classic British boot.