Dr Martens: Asia drives recovery for FTSE boot-maker as Europe falters
Dr Martens reported a recovery in revenue driven by e-commerce sales in Asia and a turnaround in America.
Overall group revenue rose by three per cent to £267m in constant currency, an adjustment of figures to align the number of reporting days in the current and prior reporting periods, in the third quarter of the year, the firm told markets this morning.
This was fueled by reduced losses in America and higher demand from the Asia Pacific region during the quarter. Revenue rose 14 per cent year on year in Asia, driven by e-commerce growth.
The brand’s bosses went without bonuses last year after “disappointing” results, blaming weak consumer demand in the US for a puncture in its earnings.
America is one of the business’s biggest markets, but it has faced a number of challenges in the region, including the hangover from bottleneck issues in its Los Angeles warehouse.
Returning revenue in America to growth is one of Dr Martens’ “key objectives” this year. The firm said it was “on track” to achieve this goal.
Direct-to-consumer revenue in America rose four per cent in constant currency, a significant improvement on previous quarters.
In the first quarter, revenue in the Americas fell by 26 per cent, and in the second it fell by 17 per cent. Dr Martens expects full-year revenue in the Americas to be down by 12 per cent.
Direct-to-consumer revenue in Europe fell by 5 per cent year on year, impacted by the “deep promotional nature of several markets, especially in December, when we maintained our discipline and only participated in promotional activity in line with our discounting strategy,” Dr Martens said.
It expects overall group revenue for the full year to be down nine per cent year on year in constant currency, at £599m.
This will be driven by a further contraction in its wholesale business, expected to be down by 19 per cent year on year.
Its direct-to-consumer arm is expected to be down two per cent year on year, driven by losses in the first half of the year.
Chief executive Ije Nwokorie said: “Our Q3 trading was as expected and our outlook for FY25 remains unchanged.
“We have made good progress against our objective of turning around our USA performance, with USA direct-to-consumer in positive growth in Q3.
“We continue to actively manage our costs and are on track to meet our inventory reduction target for FY25. The team and I are squarely focused on returning the business to sustainable and profitable growth.”