Dr. Martens, the renowned British footwear and clothing brand, has announced that it expects a decrease in revenue and profit for fiscal 2024 due to the difficult consumer environment in the U.S. This has resulted in mixed trading during the second half of the year, following a weaker first half.
The company now predicts a high single-digit percentage decline in revenue for the fiscal year ending in March, compared to the previous year. In fiscal 2023, Dr. Martens reported £1.0 billion ($1.27 billion) in revenue.
As a result of this anticipated drop, earnings before interest, taxes, depreciation, and amortization (EBITDA) are expected to fall below the lower end of market consensus. Additionally, pretax profit is projected to be negatively impacted by approximately £5 million due to higher net finance costs.
According to market consensus, EBITDA for the year is estimated to range between £223.7 million and £240.0 million, with pretax profit anticipated to be between £128.7 million and £148.0 million.
In light of the prevailing macro-economic uncertainty, Dr. Martens has withdrawn its previous guidance of high single-digit revenue growth for fiscal year 2025.
During the six months that ended on September 30, the company recorded £25.8 million in pretax profit, a decrease from the £57.9 million reported during the same period the previous year. Driven by reduced volumes to EMEA retailers, the exit from its China distributorship, and weaker performance in the U.S., revenue declined from £418.6 million to £395.8 million, as stated by the London-listed group.
Chief Executive Kenny Wilson acknowledged that it will likely take longer than initially expected to observe an improvement in the company’s results in the U.S., given the challenging business environment.
Despite these challenges, the board of Dr. Martens has declared an interim dividend of 1.56 pence per share, which remains unchanged from the previous year.