Dr Martens says addressing US issues is top priority, Q1 plays out as expected

Dr Martens issued a trading update ahead of its annual general meeting on Thursday, and said that trading in its financial year to date has been “as expected”. 

It didn’t put an exact figure on what the word “expected” meant but referenced what it had said in its year-end results announcement.

Back at the start of June it had issued revenue guidance for the new FY24 year of mid-to-high single-digit growth in constant currency.

It forecast lower revenue and margin in H1 than H2, with H1 revenue to be “broadly in line” with FY23 and the EBITDA margin to be 5-6 ppts lower.  

Recent trading in June and early July clearly hasn’t changed that view and after all, Q1 that begins in April is the smallest period of its financial year, representing the end of spring/summer trading.

On the plus side, in Q1 and the start of Q2, DTC “has seen very good growth in both EMEA and APAC, with continued strength in retail as traffic recovers post-Covid, and good e-commerce growth”. 

As planned, wholesale revenues have been lower year on year across all three regions. This includes the impact of the “strategic decisions to reduce EMEA e-tailer supply and cease sales to the China distributor ahead of the contract end”.

Each region so far is performing as expected. EMEA is “delivering a very pleasing performance and APAC has seen good growth, driven by Japan”. Revenues in the Americas have been lower, “driven by wholesale”. 

The company said that addressing its performance in the region “remains our number one priority for FY24. In Americas DTC, the actions we’re taking are progressing to plan, and we continue to expect that it will take until the second half to see a meaningful improvement here”.