Dr. Martens: 'Hot summer' pushes half-year revenue down

Dr. Martens reported a 9.8 percent drop in first-half revenue to 290.4 million pounds, as exceptionally hot summer weather hit demand for its core boots category, particularly in Europe.

On a constant currency basis, revenue for the 26 weeks ended September 27 fell 9.2 percent to 292.4 million pounds, the British footwear company said in its half-year results on Thursday. Adjusted loss before tax widened to 13.7 million pounds from 9.4 million pounds a year earlier. Reported loss before tax narrowed to 8.5 million pounds from 11 million pounds, helped by 8.9 million pounds received from the sale of its rights to US IEEPA tariff refund claims. Adjusted EBIT came to a loss of 2.8 million pounds, compared with a profit of 3.1 million pounds in the prior-year period.

“During the first half we experienced a challenging period for our core boots category, which was impacted by the exceptionally hot summer weather. The weakness in boots combined with the impact of the planned critical changes to our DTC proposition means that the H1 performance we’re announcing today is disappointing, with Group revenue down 9% CC,” said chief executive officer Ije Nwokorie in a statement.

Boots decline, shoes and sandals grow

Boots revenue fell 20 percent and accounted for 44 percent of first-half revenue, down from 49 percent a year earlier. Shoes revenue rose 1 percent to represent 41 percent of sales, while sandals revenue grew 5 percent, led by the Dunnet Flower and Zebzag styles, to account for 11 percent. Bags and accessories revenue declined 11 percent.

By channel, direct-to-consumer (DTC) revenue decreased 13.6 percent to 155.1 million pounds, while B2B revenue declined 5.1 percent to 135.3 million pounds, partly due to shipment timing differences between September and October.

UK sales down by a fifth

In the US, revenue fell 5.1 percent at constant currency to 102.1 million pounds. UK revenue dropped 21.3 percent to 42 million pounds in what the company described as a challenging and highly promotional market. DACH revenue was down 2.3 percent at 33.5 million pounds, and Japan declined 2.5 percent at constant currency to 19.7 million pounds.

Revenue in other managed markets fell 12.9 percent to 79 million pounds, with weakness in France, Italy and Spain, where consumer confidence and hot weather proved particularly challenging, outweighing double-digit growth in South Korea. Partner markets revenue rose 1.9 percent to 16.1 million pounds.

Gross margin was steady at 65.3 percent. Marketing costs increased by 3 million pounds at constant currency ahead of the launch of the company’s new ‘With Bouncing Soles’ brand platform in late September, while other operating costs were cut by 13 million pounds, adjusted for the reclassification of retail freight costs.

Dr. Martens ended the period with 233 directly operated stores, having opened two and closed nine. Its first upgraded Brand Centres have opened in Paris, New York and Munich, with Los Angeles to follow.

Net debt, including leases, stood at 310.8 million pounds, compared with 302.3 million pounds a year earlier. The company declared an unchanged interim dividend of 0.85 pence per share.

Peak trading ‘crucial’ for full year

Dr. Martens said October revenue improved on a very weak September and was broadly in line with the second-quarter run rate of a mid-teens percentage decline. B2B revenue has started to recover from September’s timing impacts, while DTC remains challenging, with boots continuing to drive the decline.

The company said November, December and early January are crucial for the full-year outturn, leaving a wide range of possible outcomes for revenue and profit. As of November 11, sell-side consensus stood at 777 million pounds for revenue and 65.7 million pounds for adjusted profit before tax. FY27 guidance was left unchanged.

“Trading in the key weeks ahead will be crucial to determining our full year outturn,” said Nwokorie.

This article was written with the assistance of an AI tool.