A “challenging backdrop” in the US has resulted in improvements in the region taking longer than expected, following operational issues and a bottleneck at its Los Angeles distribution centre, according to Dr Martens’ CEO.
For the six months to 30 September 2023, the British bootmaker saw pre-tax profits fall 55% to £25.8m, while EBITDA decreased 13% and sales dropped 5% to £395.8m.
However, the newly published results did highlight demand for the footwear brand, in geographies where there have been no operational issues. Its Direct to Consumer (DTC) revenues were up 11%, with ecommerce increasing by 5%.
Furthermore, Dr Martens opened 25 new own stores globally, with retail revenue up by 17%.
“We saw a continued strong DTC performance in EMEA and APAC. In the USA, 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,” said Kenny Wilson, chief executive officer, Dr Martens.
“It is likely, however, that given the challenging backdrop it will take longer to see an improvement in USA results than initially anticipated. Notwithstanding the clear challenges we face in the USA market we remain very confident in our iconic brand and the significant growth opportunity ahead of us.
“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.”
The statement stressed that there is still a large part of the financial year ahead of the retailer. But it did predict that its full year revenue will decline by high single-digit percentage year-on-year.
Russell Pointon, director of consumer at Edison Group, commented: “Current trading into the third quarter has been weaker than expected across the board, albeit with some signs of improvement in some regions in more recent weeks. The trading is weak enough to force management to reduce guidance again for FY24 and given macroeconomic uncertainty has withdrawn its prior guidance for high-single-digit revenue growth in FY25.”
Dr. Martens is ranked Top500 in RXUK Top500 research.