Dr Martens backs FY guidance as Q3 revenues tick up
By Michele Maatouk
Date: Monday 27 Jan 2025
(Sharecast News) - Dr Martens backed its full-year guidance on Monday as the iconic boot maker reported an uptick in revenue thanks to a solid performance from the ecommerce segment.
In a statement for the 13 weeks to 29 December 2024, the company said revenue rose 3% at constant currency to £267m.
Direct-to-consumer (DTC) revenue was up 1% in Q3. Dr Martens said the DTC performance was the result of e-commerce revenue growing 2% and retail revenue declining 1%.
By regions, DTC revenue rose 4% in the Americas, in line with the company's key objective of returning the Americas to positive growth in the second half.
DTC revenue was up 17% in APAC, driven by ecommerce. Dr Martens hailed a strong performance across the region, with its largest market Japan continuing to deliver good growth.
In EMEA, DTC revenue dipped 5%, impacted by "the deep promotional nature of several markets", especially in December, when the company maintained its discipline and only participated in promotional activity in line with its discounting strategy.
Wholesale revenue was up 9% "against a weak comparative", it said.
Chief executive Ije Nwokorie said: "Our Q3 trading was as expected and our outlook for FY25 remains unchanged.
"We have made good progress against our objective of turning around our USA performance, with USA DTC in positive growth in Q3. We continue to actively manage our costs and are on track to meet our inventory reduction target for FY25. The team and I are squarely focused on returning the business to sustainable and profitable growth."
At 0945 GMT, the shares were down 3.2% at 70.10p.
Russ Mould, investment director at AJ Bell, said: "The seller of iconic footwear made a start to life as a public company as if it had its shoelaces tied together. Its latest statement is a case of one step forward, two steps back.
"The company's big focus has been on improving the performance of its US direct-to-consumer business and restoring its revenue to positive growth in the second half. On a constant currency basis, it is on track to do so but the company doesn't spell out if this is the case without this adjustment. Reading between the lines it likely isn't, based on the disparity between the reported figure and constant currency figure for the Americas as a whole.
"In the Europe, Middle East and Africa region Dr. Martens' showing is weak whatever way you want to spin it - although the company may have done its bit to protect brand integrity by not engaging in heavy discounting around Christmas.
"Performance is improving on a dismal first half of the year and the company remains on track to hit its guidance for the full year. The Asia Pacific region is performing well, albeit from a much lower base.
"While this statement is not a total disaster it will be unlikely to win over many sceptics. Dr. Martens still has a big job on its hands to rebuild its credibility with the market."
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