Dr Martens shares tanked on Thursday after the footwear company said revenue had missed expectations due to disruption and disappointment in their US operations.
The footwear brand has faced disruption at their LA-based distribution centre which led to bottlenecks and ultimately a reduction in FY23 EBITDA by £16-25m due to lower wholesale revenue.
There was overall group revenue growth of 5% for the year-to-date, but the disappointing events in the wholesale unit meant a sharp miss of estimates.
Dr Martens shares were down 25% to 155p at the time of writing.
‘’Dr Martens has been caught seriously on the back foot with operational problems at its new distribution centre in Los Angeles, piling yet more problems on the beleaguered bootmaker. The transfer of inventory to the new hub was faster than planned, causing a bottleneck of stock, and the chaos is set to reduce wholesale revenues by up to £25 million,” said Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown.
“It’s forced the company to take on new space and an extra shift of staff to sort out the problems which will also push up costs. This is another big migraine for the company, which was also dealing with the headache of disappointing US sales in the fourth quarter, which is viewed as a key market for growth for the company.”