Thursday's Price Mover: Dr Martens Slumps

Shares in the bootmaker lost 25% as pretax profit fell by 55% to £25.8 million from £57.9 million in 2022

Alliance News 30 November, 2023 | 2:24PM James Gard
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Shares in Dr Martens (DOCS) slumped 25% in London on Thursday after a fall in profits and warning about its struggles in the US market. It's the second consumer-focused company to face a share price shock in as many days, after Halfords slumped on Wednesday.

The London-lised boot manufacturer said in the half-year ended September 30, pretax profit fell by 55% to £25.8 million from £57.9 million the year before.

Earnings before interest, tax, depreciation and amortisation (EBITDA) fell 13% to £77.6 million from £88.8 million a year prior. Dr Martens expects financial year 2024 EBITDA to be "moderately below the bottom end of the range of consensus expectations" of £223.7 million to £240.0 million.

In financial 2023, the previous fiscal year, it achieved an EBITDA of £245 million and revenue of £1 billion. Dr Martens also added that pretax profit for the year will be hurt by higher net finance costs of around £5 million.

Revenue declined 5.4% to £395.8 million from £418.8 million the year before. Its top line was hurt by an increasingly difficult consumer environment in the US, the company said.

Shares in the bootmaker, which listed in 2021 at 390p, are down 56% so far this year at 85p. 2021 saw a flurry of flotations including Deliveroo, Moonpig, Darktrace and Wise. Deliveroo, Moonpig and Dr Martens are below their float price, but Darktrace and Wise are at similar levels to the IPO.

Dr Martens maintained its interim dividend at 1.56p per share.

Chief executive officer Kenny Wilson cautioned that a bounce in its US division will take longer to materialise.

"It is likely, however, that given the challenging backdrop it will take longer to see an improvement in USA results than initially anticipated. Notwithstanding the clear challenges we face in the USA market we remain very confident in our iconic brand and the significant growth opportunity ahead of us," the CEO added.


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