"I am pleased to report another strong set of results covering the first half of our financial year (…). Our growth is built on the successful execution of our DOCS strategy, led by the DTC-first approach, with DTC revenue up 21%. At the heart of our continued success is the strength of our brand, highlighted by underlying pairs growth and continually improving brand metrics. We have further pricing headroom for AW23 so we will offset cost inflation once again. Although there are economic challenges ahead, we are well positioned for future growth", commented Kenny Wilson, Chief Executive Officer.

First Half Results

In the first half of fiscal 2023, Dr. Martens' revenue grew by 13%, as compared to the same period of last year, reaching 418.6 million British pounds (487 million euros).

As of the 30^th of September, the brand's DTC channel revenue was up by 21% (by 15% in constant currency), amounting to 179.8 million British pounds (209 million euros), "led by a strong performance from retail", whose revenue totalled 91.0 million British pounds (106 million euros), increasing by 38% (by 33% in constant currency), on a comparable basis to a similar period of fiscal 2022. Dr. Martens noted that the results recorded in the retail channel were "supported by the accelerated new store opening programme and a consistent recovery in footfall across" EMEA and the US.  

Additionally, as consumers returned to physical stores, e-commerce revenue grew by 8% (by 1% in constant currency) in this period, year-over-year, totalling 88.0 million British pounds (103.5 million euros). Nonetheless, the channel was also impacted negatively by the lockdowns in Shanghai during the first quarter, where the company's distribution centre is located. In the same timeframe, wholesale channel revenue increased by 15% (by 8% in constant currency), adding 238.8 million British pounds (276.7 million euros) to the total revenue.

Dr. Martens reported growth across all regions, with emphasis on the America region, which registered a revenue increase of 31% to 179.7 million British pounds (208.2 million euros) in the first six months of the year, on a comparable basis to the first half of fiscal 2022.

In the first half of the current fiscal year, EBITDA was flat at 88.8 million British pounds (102.5 million euros) due to the increased investment in new stores, marketing and people, and the EBITDA margin accordingly lowered by 2.8% percentage points, year-over-year, to 21.2% this first half.

As DTC growth softened in the second quarter of the year, the company's profit after tax amounted to 44.7 million British pounds (51.8 million euros) in the six months to the 30^th of September, which reflects a decline of 8%, as compared to the same period of last year.  

Fiscal 2023 Outlook

Dr Martens has issued a warning on full year profits due to weaker consumer demand, higher investment in its DTC channel and a stronger US dollar. While still maintaining revenue guidance of high-teens growth for fiscal 2023, it is anticipating a decline in the EBITDA margin in range of 100 to 250 basis points from last year. The company has decided to target investment for the future rather than decreasing spending in the short-term.