Dr Martens shares jumped on Thursday after the bootmaker made positive sounds about their outlook in first-half results that revealed falling revenue and widening profits.
Revenue fell 18% (16% at constant currency) to £324.6 million, though this performance was in line with the company’s expectations and previous guidance of a 20% decline.
The revenue decline was particularly pronounced in the wholesale segment, which dropped 29%. The direct-to-consumer (DTC) business showed more resilience, declining by 7%, with e-commerce performing slightly better than retail stores. Within the DTC channel, retail revenue decreased by 9%, while e-commerce sales fell by just 4%.
Looking at regional performance, the Americas showed the steepest decline, with revenue down 22%, followed by EMEA (Europe, Middle East, and Africa) at 16%, while APAC (Asia Pacific) demonstrated the most resilience with a 12% decline.
However, investors choose to look past a very bad trading period in the first half and focus on signs of a brighter future. The company said they expect their US DTC business to return to growth in the second half, which will be a welcome relief for shareholders after the company has struggled to build a meaningful foothold in the market.
“Dr. Martens’ brand strength came from its iconic connection to music, giving it lasting cultural relevance. Recent shifts to fashion-based rebellion lacked this depth. Experts suggest returning to music ties to reinforce their iconic products and ensure long-term growth,” said Yanmei Tang, Analyst at Third Bridge.
“In Europe, Dr. Martens is the go-to brand for boots, but in the U.S., awareness is low. Competitors like Steve Madden and Aldo have filled the gap, and Dr. Martens hasn’t fully invested in brand recognition.
“Their store expansion strategy doesn’t work in America because the U.S. has a lower population density than Europe. Our experts suggest they should rightsize the stores to free up capital for marketing spend, focusing more on performance marketing, direct-to-consumer through e-commerce, and building brand equity for their iconic product and the boot category overall.”
Investors will also be pleased that the firm is taking action on costs and reducing inventory.
Dr Martens shares were 12% higher at the time of writing.