Dr Martens Share Price Crashed 27% on Falling Half-Year Profits

The Dr Martens PLC (LON: DOCS) share price crashed 26.99% as of 9:47 GMT after releasing its first-half earnings results for the six months to 30 December 2023. The company’s revenues experienced a 5% decline (3% in constant currency terms), primarily attributed to the underperformance in the USA wholesale sector.

The company’s profits before tax fell 55% to £25.8 million from the £57.9 million recorded in H1 fiscal year 2023. The firm’s profits after tax fell 57% to £19.0 million from last year’s £44.7 million. The company’s basic EPS fell 58% to 1.9p from 4.5p. The disappointing profit figures led to the decline in Dr Martens share price.  

However, the footwear brand's direct-to-consumer (DTC) revenue saw a promising 9% increase (11% in constant currency) and accounted for 50% of the overall revenue mix. Retail revenue also showed robust growth, up by 15% (17% in constant currency), while e-commerce revenue saw a more modest 3% increase (5% in constant currency).

The decline in wholesale revenue resulted from strategic decisions to reduce volumes supplied to EMEA retailers and the exit from the China distributor, along with a weaker performance in the USA wholesale segment compared to earlier projections.

Geographically, the performance aligned with expectations, featuring strong growth in the EMEA region, where revenue increased by 9% (8% in constant currency). Japan's DTC segment had a remarkable 41% constant currency revenue growth. 

However, the American region saw a decline of 18% (15% in constant currency), primarily driven by challenges in the wholesale sector.

The company launched a new marketing brand platform called “Made Strong”, with impactful city activations held in New York, London and Tokyo. The introduction of the 14XX capsule collection marked the beginning of a faster pace of product innovation, fostering brand energy. The company expanded its global presence by opening 25 new proprietary stores.

Kenny Wilson, Chief Executive Officer, said: “We saw a mixed trading performance in the first half of the year. We made good progress with our strategic priorities, continuing to invest in the business and our people to drive sustainable long-term growth. During the period, we focused on controlling the controllables: we delivered significant supply chain savings, successfully transformed our North America distribution network, opened 25 new stores, and launched a Dr Martens UK repair service.”

Dr Martens share price. 

The Dr Martens share price crashed 26.99% to trade at 83.6p from Wednesday’s closing price of 114.5p.