Dr. Martens Shares Jump Despite H1 Loss, YoY Revenue Decline

Shares of iconic footwear brand Dr. Martens (LON: DOCS) rallied more than 13% Thursday despite the company reporting a £28.7 million pre-tax loss for the first half of FY25, compared to a £25.8 million profit in the same period last year.

Revenues dropped 18% year-on-year to £324.6 million, slightly beating its guidance of a 20% decline as the company navigates a transitional year.

The decline in revenue was driven by challenges across all regions, with wholesale revenue falling 29% and direct-to-consumer (DTC) revenue down 7%. However, the DTC mix improved by 6.8 percentage points to 56.4%, bolstered by the brand's pivot to a product-focused marketing strategy. 

All regions performed in line with the company’s expectations, with EMEA revenue down 16%, Americas revenue declining 22%, and APAC down 12%.

DOCS said early sales of new product lines have been promising, positioning DTC growth as a key focus for the second half.

CEO Kenny Wilson highlighted progress on four strategic priorities: revamping marketing, improving US DTC performance, cutting operating costs, and strengthening the balance sheet. 

Cost-saving measures are now expected to be at the top of the £20 to £25 million range by FY26, while inventory declined by £69.1million and net debt fell by 27% to £348.7 million, supported by a successful refinancing.

Dr. Martens reaffirmed its FY25 outlook, anticipating improved second-half performance buoyed by peak season trading and new product sales. An interim dividend of 0.85p was declared, in line with previous guidance.

Despite the financial setbacks, investors appear positive following the results, with the company’s focus on streamlining operations and launching new products showing promising early signs.