Business Express is an online portal that covers the latest developments in the world of business and finance. From startups and entrepreneurship to mergers and acquisitions, Business Express provides reporting on the stories that matter most to business leaders and decision-makers.The website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website.
2023 06 01T090537Z 2 LYNXMPEJ5015M RTROPTP 4 DR MARTENS RESULTS - Business Express

Dr Martens tripped up by tough U.S. market


Dr Martens tripped up by tough U.S. market

By Eva Mathews and Helen Reid

(Reuters) -Dr Martens shares dropped more than 10% on Thursday after the British bootmaker warned investments would hit profit margins this financial year and the consumer backdrop in the United States “was the toughest in the world at the moment”.

The U.S. is the company’s second-largest market and weakness there contributed to a drop in core earnings of more than a quarter in the year ended March 31.

Dr Martens, whose pricey work boots have been fashionable since the 1960s, has been struggling with waning demand in the U.S. as consumers cut back on discretionary spending amid high inflation. It has also faced logistical problems at a recently opened distribution centre in Los Angeles that drove up costs.

“We think that the consumer backdrop in the United States is the toughest in the world at the moment,” CEO Kenny Wilson said in an interview, adding that looked set to continue.

“I think their consumer has been under pressure for a longer period of time … but this is also a sort of shared misery with everyone else,” Wilson added.

The company sees core profit (EBITDA) margins falling 1-2 percentage points this fiscal year as it plans to invest 50-55 million pounds over the coming years, including in new stores.

Profit before tax fell 26% to 159.4 million pounds ($198 million) in the year ended March 31.

Don't miss out on any breaking news or insightful opinions!
Subscribe to our free newsletter and stay updated on the go!


By submitting this form, you are consenting to receive marketing emails from: Global Banking & Finance Review. You can revoke your consent to receive emails at any time by using the SafeUnsubscribe® link, found at the bottom of every email.

“A series of profit warnings … has knocked investors’ confidence in the iconic British bootmaker – and its full year results are unlikely to inspire any immediate change in their perceptions,” said eToro analyst Mark Crouch.

One bright spot was that annual revenue crossed 1 billion pounds for the first time, helped by demand in Europe and Japan.

Direct-to-consumer sales also made up more than half of the total, in another first.

Dr Martens said price increases would help offset some of the cost pressures. It raised prices 6% last fiscal year.

Its shares were down 10% to 140.98 pence at 0850 GMT.

($1 = 0.7923 pounds)

(Reporting by Eva Mathews in Bengaluru and Helen Reid ; Editing by Sherry Jacob-Phillips and Mark Potter)

 

Recent Post: