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Dr Martens lowers FY guidance amid US warehouse issues

By Huw Hughes

Jan 19, 2023

Management

Image: Dr Martens

British brand Dr Martens has lowered its full-year profit guidance for the second time in two months amid supply chain disruption and a drop in DTC demand in the US.

The company said Thursday it expects FY EBITDA of between 250 million pounds and 260 million pounds, which could be up to 25 million pounds lower than its previous estimate.

Chief executive officer Kenny Wilson blamed “significant operational issues” at the company’s new LA distribution centre, as well as weaker than expected direct-to-consumer (DTC) demand in the US, partly linked to “unseasonably warm weather”.

The company said it expects full-year revenue growth of between 11 percent and 13 percent.

Q3 revenue misses

The updated outlook came as the iconic bootmaker reported revenue below expectation in the third quarter ended December 31, which included the important Christmas trading period.

Overall revenue was up 9 percent in the quarter, driven by an 11 percent increase in DTC revenue. Analysts had expected revenue growth of around 16 percent.

In terms of markets, the EMEA and APAC markets were in line with expectation, but America was behind.

The company said it opened nine net new stores in the quarter and is on track to open 30 net new stores in the year along with the transfer of 14 franchise stores in Japan.

For the year to date, revenue at Dr Martens was up 12 percent year-on-year.

In November, Dr Martens warned on its full-year profit amid weakening demand and a strong dollar.

Dr Martens