Dr Martens has reported a significant drop in profits, prompting cost-cutting measures.
- The company saw profits after tax fall by 46.3% to £69.2m for the year ending 31 March 2024.
- Revenue plummeted by 12.3%, attributed to weak US consumer demand and increased costs.
- Direct-to-consumer sales rose 9%, driven by a strong performance in shoes and sandals.
- Kenny Wilson, CEO, announced a strategic focus on the US market and a £20m-£25m cost-saving plan.
Dr Martens has seen a notable decline in profits, with the company reporting a 46.3% decrease in profits after tax, amounting to £69.2 million for the year ending 31 March 2024. This has led the company to implement measures aimed at reducing costs and addressing financial challenges.
The footwear giant experienced a revenue decline of 12.3%, largely due to persistent weak consumer demand in the United States. Additionally, the company faced increased depreciation, amortisation charges from ongoing investments in new stores, IT projects, and higher interest costs, all contributing to the profit drop.
In contrast to the overall decline, direct-to-consumer sales have shown resilience with a 9% increase, accounting for 62% of total sales. This growth was particularly strong in the shoes and sandals categories, with both seeing over 20% growth year on year.
To tackle the challenges, CEO Kenny Wilson outlined plans to enhance demand within the US market. A detailed strategy focuses on increasing marketing investments and executing a cost-saving action plan targeting savings between £20 million and £25 million. This is part of a broader effort to position the company for growth in the coming years.
As part of its expansion efforts, Dr Martens has successfully opened 35 new stores globally, mainly across continental Europe and the Asia-Pacific region. This expansion is seen as a strategic move to bolster its international presence.
Dr Martens is navigating a transitional year with strategic measures to ensure future growth and stability.
