Dr. Martens, the iconic British footwear brand, has proven its resilience and growth in its first results since becoming a publicly listed company. Despite the challenges brought forth by the pandemic, the company experienced a 15% increase in revenue and an impressive 22% rise in EBITDA for the year ending March 31.
CEO Kenny Wilson attributes this success to the company’s focus on direct-to-consumer sales and the expansion of its e-commerce presence. Dr. Martens achieved a remarkable 73% growth in e-commerce revenue, which accounted for 30% of its total revenue mix. Wilson also highlighted the investments made in the supply chain and the close relationships with suppliers, allowing the company to quickly adapt to the ever-changing retail environment during the pandemic.
A closer analysis of the financial figures reveals the extent of Dr. Martens’ accomplishments. Revenue reached £773 million, marking a 15% increase (or 16% in constant currency), while EBITDA saw a significant jump of 22% to £224.2 million. Adjusted pre-tax profit also rose by 34% to £151.4 million. However, it is important to note that net profit fell by 52% to £35.7 million due to exceptional items pertaining to the company’s IPO, totaling over £80 million.
Dr. Martens experienced strong growth in all regions as expected. The Americas and EMEA both saw a 17% increase in revenue, while APAC reported a growth of 7%. Although Japan, the largest Asian market, experienced slower growth due to the pandemic’s impact on physical retail, the company’s revenue in China grew by an impressive 46%. Germany stood out as the top-performing market in EMEA following a successful transition to direct operation in the previous year.
Direct-to-consumer sales accounted for 43% of Dr. Martens’ revenue, a figure that decreased by two percentage points due to store closures. D2C retail revenue fell by 40% to £99.7 million, making up 13% of the revenue mix. However, the surge in e-commerce revenue, rising by 73%, compensated for the decline in retail sales, contributing 30% to the total revenue mix.
Wholesale also played a significant role in Dr. Martens’ growth, with a revenue increase of 18% to £437.9 million. The company attributes this growth to the strong performance of its e-tail customers and robust trading with US customers. Dr. Martens aims to establish fewer, deeper wholesale relationships with quality partners worldwide, while expecting wholesale revenue to become a smaller proportion of its overall revenue.
Another notable achievement is the increase in gross margin, rising by 1.2 percentage points to 60.9%. This improvement can primarily be attributed to supply chain efficiencies and faster delivery.
Despite the challenging business environment, Dr. Martens continued to invest in its brand and operations. The company added over 250 employees, opened 18 new stores, and established a third-party distribution center in New Jersey, USA.
Looking ahead, Dr. Martens maintains its guidance provided at the time of its IPO. It expects high double-digit revenue growth in the fiscal year 2022 as it moves past the impact of the pandemic from the previous fiscal year. For the medium term (fiscal year 2023 and beyond), the company forecasts mid-teens revenue growth. Its strategic goal is to achieve a 40% e-commerce mix and a total direct-to-consumer mix (including retail) of 60%.
Dr. Martens has also announced its commitment to sustainability, with goals to achieve carbon net zero by 2030 and produce all footwear from sustainable materials by 2040.
Overall, Dr. Martens’ first results as a publicly listed company showcase its ability to navigate challenging times and deliver strong financial performance. With its robust strategy, focus on direct-to-consumer sales, and dedication to sustainability, the brand is well-positioned for future growth and continued success in the global footwear market.
References:
1. Dr. Martens Investors Relations – [insert link here]
2. Dr. Martens Official Website – [insert link here]
