Companies

Dr. Martens reports half year results for fiscal 2025

Nov 29, 2024 United Kingdom

In its transition year, the British brand reported decreased revenue for the first six months of fiscal 2025. In contrast, the company improved its balance sheet, progressing towards key objectives

"Our first half performance was in line with expectations and we remain confident in our ability to deliver on our plans and the targets we set for fiscal 2025", commented Kenny Wilson, Chief Executive Officer at Dr. Martens.

"As we shared in May," – he continued – "this is a year of transition and we have made good progress with our four main objectives: pivot our marketing to a relentless focus on our product, turn around our US DTC performance, reduce our operating cost base and strengthen the balance sheet".

Dr. Martens reported first half results for the 26 weeks that ended on the 29th of September 2024. Revenue declined by 18% in the period compared to the previous year, reflecting challenges across wholesale, retail and e-commerce channels.

Channel Performance

Wholesale revenue experienced the sharpest drop, with a 29% decrease year-over-year due to weak performance in the US and shipment timing issues in EMEA and APAC.

Direct-to-consumer (DTC) revenue also fell at a lesser rate of 6.8% compared to fiscal 2024, supported by slight gains in e-commerce.

Retail revenue declined by 9% on a comparable basis. The company closed 11 stores while opening 10 new locations, maintaining a steady store count of 238 globally.

Regional Performance

The EMEA region experienced a 16.4% revenue decline compared to the first half of fiscal 2024, driven by early Easter sales, weak sandals performance and high promotional competition. Newer markets such as Italy, Spain and the Nordics showed growth, and German revenue remained stable.

The Americas saw a 22.3% revenue decrease year-over-year, heavily impacted by a 34% decline in wholesale orders and weak retail foot traffic compared to fiscal 2024.

The APAC region recorded an 11.9% revenue decline on a comparable basis, with notable challenges in China and Hong Kong. However, Japan and parts of APAC reported positive e-commerce growth due to strong demand.

Profitability

Dr. Martens’ profitability was significantly impacted, with EBITDA falling by 68.6% compared to the previous year to 24.4 million British pounds (29.4 million euros). Gross margin fell marginally by 0.4 percentage points to 64%.

Balance Sheet

Inventory remained stable compared to the end of March 2024 and decreased by 69.1 million British pounds (82.9 million euros) year-over-year.

Net debt declined by 130.2 million British pounds (156.2 million euros) compared to the same period last year despite typically higher debt levels during this stage of the cash cycle.

Fiscal 2025 Outlook

The company maintained its key fiscal 2025 targets, including positive US DTC growth in the second half and planned inventory and net debt reduction.

Adjustments were made to regulate store expansion plans and capital expenditure projections. Fewer openings are now anticipated, and the capital expenditure forecast was reduced to 30 million British pounds (36 million euros) from the previous guidance of 40 million British pounds (48 million euros).

The company also highlighted potential currency headwinds, particularly from the US dollar, Japanese yen and euro.

1 GBP = 1.20 EUR

Image Credits: blackcomb-shop.eu

United Kingdom Companies Dr. Martens Footwear Quarter Results Results