Dr Martens says higher costs to affect full-year results, CFO retires

(Alliance News) - Dr Martens on Friday said strong direct-to consumer growth drove its revenue ...

Alliance News 14 April, 2023 | 8:13AM
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(Alliance News) - Dr Martens on Friday said strong direct-to consumer growth drove its revenue increase, but expects higher costs to impact its full year results.

The London-based footwear brand said its full year revenue for the year ended March 31 was up by 10%, with a 6% revenue growth in the final quarter of financial 2023. The projection was below January's guidance of between 11% and 13%.

Dr Martens attributed the increase in revenue in the final quarter to "strong direct-to-consumer growth" in Europe, Middle-East and Africa as well as Asia-Pacific regions.

Nevertheless, the company noted a 4% fall in wholesale revenue in the last quarter of the year, mainly driven by operational issues at the Los Angeles distribution centre, and shipment reduction to its China distributor.

Financial 2023 total incremental costs associated with the LA centre were around GBP15 million, higher than the originally expected GBP8 million to GBP11 million. Dr Martens expects the same figure for financial 2024 as a result of rent annualisation.

As a result of higher costs at its LA distribution centre and lower wholesale revenue, the bootmaker now expects its full year earnings before interest, tax, depreciation and amortisation to be around GBP245 million, down 6.8% from GBP263 million. It would also be below January's guidance of between GBP250 million and GBP260 million.

Looking ahead, the company said it has made "good progress" on resolving operational issues in LA, and shipment volumes are back to "normal levels." In addition, Dr Martens has begun expanding its New Jersey distribution centre, and reported a successful initial test shipment in March.

Separately, Dr Martens also announced on Friday its chief financial officer, Jon Mortimer, will retire after seven years with the firm. Mortimore will continue in his role until a successor is appointed to ensure a "smooth transfer," the company said.

Dr Martens is in the process of searching for a new CFO.

Chair Paul Mason said: "On behalf of the board, I would like to thank Jon for his central role in driving the strong growth and strategic development of Dr. Martens over the last seven years. His knowledge of the business and understanding of the company's value drivers have played a key part in helping develop the business during this period."

Shares in Dr Martens were up 2.3% at 144.50 pence in London on Friday morning.

By Sabrina Penty; Alliance News reporter

Comments and questions to newsroom@alliancenews.com

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Securities Mentioned in Article

Security Name Price Change (%) Morningstar
Rating
Dr. Martens PLC Ordinary Shares 78.40 GBX -0.51 -

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