Profits slump at Dr Martens despite £1bn revenue milestone
The footwear firm said distribution problems and marketing mistakes were among the reasons for the decline in profits, but said its brand remains strong.
Dr Martens has reported a slump in profits despite hitting a £1bn revenue milestone for the first time - after admitting it made mistakes against the backdrop of "a challenging consumer environment".
The footwear firm reported pre-tax profits of £159m for the year ending 31 March, a fall of 26% on the year before.
The British brand said it had made several "operational mistakes", including with marketing campaigns, which it said had been "too focused on shoes and sandals" to the detriment of its boots.
This likely contributed to a 10% fall in boots revenue, the company said, while it also blamed e-commerce issues, and global distribution problems, particularly with a new warehouse in Los Angeles. Covid lockdown restrictions in China also had an impact.
However, the brand said many mistakes had now been "corrected" and it was fixing other outstanding issues.
The company said that while business in the US had been weak, its performance in Europe, the Middle East and Africa (EMEA) and Japan had been "very good".
Chief executive officer Kenny Wilson hailed the company's achievement in reaching £1bn in revenue.
He said: "Reaching this milestone is testament to the strength of our brand, our long-standing strategy and the hard work and dedication of our fantastic people globally.
"Direct to consumer is now more than half our revenue and the Dr Martens brand remains strong with all key metrics either ahead of, or in line with, last year."
It expects its full-year earnings before interest, tax, depreciation and amortisation (EBITDA) margin to be one to two percentage points lower than the reported year.
Its shares were down as much as 11.7% in early trading on Thursday - its worst day in over four months.
Dr Martens made its London stock market debut in January 2021.
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