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Dr Martens sees profit slip and hikes dividend by 28%

Dr Martens shares fall sharply as British bootmaker’s profits slip – but shareholders enjoy 28% dividend hike

  • Dr Martens saw its profits slip and revenue growth slow in its half-year results
  • FTSE 250-listed company’s shares fall sharply and dividend is hiked by 28% 

Dr Martens saw its profits slip and revenue growth slow in the six months to 30 September, amid a worsening economic environment. 

The FTSE 250-listed group’s pre-tax profit shrank by 5 per cent to £44.7million, while revenues grew by 13 per cent to £418.6million, or 7 per cent without the benefit of currency fluctuations. 

The latest revenue data compares to 18 per cent growth in its past full year, or 22 per cent on a constant-currency basis. 

Dividend hike: Dr Martens hiked its dividend by 28%, from 1.22p a share to 1.56p a share

Dr Martens’ share price fell sharply today and was down 17.36 per cent or 49.73p to 236.67p in early morning trading, having fallen over 38 per cent in the last year. 

But, in a boost for shareholders, Dr Martens hiked its dividend by 28 per cent, from 1.22p a share to 1.56p a share.  

The retailer’s underlying earnings remained flat at £88.8million by the end of the period. 

Dr Martens said lower profits in the period reflected a ‘proactive decision’ of investment in new stores, marketing, people, technology and inventory ‘rather than focusing on short-term profit’.

Retail revenue grew 38 per cent to £91million, mainly due to continued traffic-led recovery in the UK, continental Europe and the US, as consumers increasingly returned to stores, the group said.

On sales of boots, the company added: ‘We saw continued success of our platform soles, including our Quad range. 

‘Platform boots that performed well with Quad soles included the Audrick, the Jetta in APAC and the Jarrick in EMEA. Within our casual range, we launched the new Boury utility boot in September ahead of AW22.’ 

Direct-to-consumer growth in the second quarter was slower than expected, the group said, pointing to the weaker ‘consumer environment’ during the period.

In the near-two months into the second half, direct-to-consumer trading was ‘variable on a week-to-week basis’, the group added. 

Dr Martens said its festive sales were, to date, ahead of forecasts and figures from the same point a year ago. 

Looking ahead, the company said: ‘We are maintaining revenue guidance of high-teens growth for the full year, on an actual currency basis.’ 

Kenny Wilson, the group’s boss, added: ‘Although there are economic challenges ahead, we are well positioned for future growth. 

‘We will continue to drive growth investment to deliver the DOCS strategy, mainly in new stores, marketing, people, technology and inventory. 

‘Reflecting our confidence in the future, our balanced global revenues and our strong balance sheet, the board has decided to increase the interim dividend by 28 per cent to 1.56p per share.’

Russell Pointon, a director at Edison Group, said: ‘In spite of the economic headwinds plaguing the retail sector, including rising inflation and the cost-of-living crisis, Dr Martens is maintaining its high teens revenue growth for the remainder of the year, however management now expects the EBITDA margin to be 1-2.5 margin points below the prior year given the strength of the US Dollar. 

‘Investors will also be reassured by the board’s proposal of an interim dividend increase of 28 per cent. The brand has successfully given supply chain issues the boot, with all factories open during the period and the opening of a new manufacturing base in Cambodia. 

‘Looking ahead, Dr Martens will look to capitalise imminently on the festive season alongside while continuing investment in new stores, marketing and tech.’

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Read more at DailyMail.co.uk