Dr Martens to cut £25m in costs as full-year profits plummet
During the year, ecommerce revenue was down 1% to £276.3m, wholesale revenue was down 28.3% to £344.0m while retail revenue grew 6.2% to £256.8m
Dr Martens is targeting £25m in cost savings after its pre-tax profits plummeted 43% to £97m in the 12 months ended March, following weak demand in the US market.
Throughout the year, revenues for the company fell by 12% to £877m, though DTC revenue rose by 2% to £533.1m, primarily driven by USA wholesale.
Over the period, ecommerce revenue fell by 1% to £276.3m, and wholesale revenues fell 28.3% to £344.0m.
EMEA revenue was down 2.5% to £431.8m, but DTC grew by 11.8% in all core markets, with UK and France both up low single-digits. EMEA EBITDA was down 3.6% to £140.8m, impacted by foreign exchange on purchases and the opex investments including the expansion of retail stores and investment in brand and demand marketing.
Americas revenue was down 23.9% to £325.8m, with DTC revenue also down 6.9%. Americas EBITDA was 35.7% lower at £64.4m, reflecting lower revenue together with additional storage costs of £13.1m due to elevated inventory levels in this market.
APAC revenue was down 7.4% to £119.5m, due to China being impacted by the planned exit of the distributor contract in June 2023 and in Japan by the transfer of 14 franchise stores at the end of the last financial year.
By category, the retailer said that DTC pairs for both shoes and sandals grew more than 20% year-on-year, whilst DTC boots pairs saw a small decline.
During the year, the retailer opened 46 new retail stores, four of which were in the UK, and closed 11.
Looking ahead, the company has said it will focus particularly on the USA market in FY25, implementing a detailed action plan to return this business to growth, targeting a return to positive DTC growth in H2.
It added that it will target £20m to £25m in cost savings, with savings from organisational efficiency and design, better procurement and operational streamlining.
Kenny Wilson, chief executive officer, said: “Our FY24 results were as expected and reflect continued weak USA consumer demand. This particularly impacted our USAwholesale business and offset our Group DTC performance, where pairs grew by 7%. We have achieved robust performances in EMEA and APAC, and our supply chain strategy continues to deliver good savings.
“We are clear that we need to drive demand in the USA to return to growth in FY26 onwards and are executing a detailed plan to achieve this, with refocused and increased USA marketing investment in the year ahead. We are also announcing a cost action plan across the group, targeting savings of £20m to £25m. I am confident that the actions we are taking as we enter this year of transition will put us in good shape for the years ahead.”
