Dr. Martens, the renowned footwear brand, has announced impressive revenue growth in its most recent financial results for the six-month period ending in September. Although the company experienced a decline in pre-tax and net profits due to increased costs and higher investments, underlying revenue surged by 18%. Dr. Martens achieved growth across all channels, with direct-to-consumer (DTC) sales rising by 21% and wholesale sales increasing by 15%. Retail sales saw a remarkable increase of 38%, while e-commerce sales rose by 8%. The company’s global growth was particularly notable in America, where revenue saw a significant rise of 31%. In the Europe, Middle East, and Africa (EMEA) region, underlying growth reached 9%, driven by DTC sales. The Asia-Pacific region also experienced a revenue increase of 9%, although it was partially impacted by the slower recovery from the COVID-19 pandemic. Notably, Japan emerged as Dr. Martens’ third most important market, contributing significantly to APAC revenues and EBITDA. Despite the improvement in gross margin, EBITDA remained steady due to increased investment in new stores, marketing, and personnel to fuel future growth.
Dr. Martens is prioritizing its own stores, as the DTC mix rose by 3 percentage points to 43% during the reporting period. The company successfully opened 21 new directly-operated stores across various regions. However, wholesale remains a crucial channel, with revenue growing by 15% through fewer accounts but with “better quality partners.” The company faced logistical and labor challenges, which affected its September wholesale revenue, but the impact is expected to be favorable in the second half of the year. Dr. Martens’ wholesale order book exceeds its full-year estimate and allows for potential cancellation risks.
In terms of product success, Dr. Martens witnessed outstanding performance in its platform soles, particularly the Quad range in boots. The Audrick, Jetta, and Jarrick platform boots also enjoyed positive reception. In the casual range, the company introduced the new Boury utility boot in September. The Adrian loafer range and Mary Janes were successful in the shoe category, along with limited edition 1461 styles inspired by prominent cities. The Voss and Blaire styles led growth in the sandal category, featuring the innovative Zebrillus lightweight platform sole. As part of its Originals strategy, collaborations with Supreme, Yohji Yamamoto, and Engineered Garments also contributed to Dr. Martens’ success.
Despite facing challenges during the pandemic, Dr. Martens has managed to overcome supply chain disruptions and is expanding its third-party logistics distribution centers in Los Angeles and the Netherlands. The company successfully implemented a price increase and remains confident about offsetting future inflation. It maintains its revenue forecast of high-teens growth for the full year and anticipates strong performance during peak trading weeks. Over the medium term, Dr. Martens aims for mid-teens revenue growth and a medium-term EBITDA margin milestone of 30%.
Dr. Martens plans to increase its marketing spend as a percentage of revenue, with a specific focus on building its social media communities. In the first half of the year, marketing spend increased by 23%, and Dr. Martens currently boasts 10.3 million followers across all channels, representing a 15% increase from the previous year. Despite the challenges and investments, Dr. Martens remains optimistic about its future and is well-positioned for continued growth.
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