Dr Martens' turnaround gathers pace as annual profit rebounds
Annual Performance and Market Trends
By Yamini Kalia
May 19 (Reuters) - Bootmaker Dr Martens reported a 61% jump in annual earnings on Tuesday, and forecast "strong" profit growth this fiscal year, buoyed by robust U.S. demand and its strategy to cut back discounts and improve margins.
Shares in Dr Martens - known for its lace-up chunky boots - were up 3.7% at 1204 GMT, having risen as much as 9.3% earlier in the day.
Strategic Initiatives and Leadership
Under CEO Ije Nwokorie, the British company has scaled back discounts and promotions, while cutting inventory to offset weak demand and cost pressures made worse by U.S. tariffs, for which it is now pursuing refunds.
Growth in the U.S. Market
"We are beginning to see green shoots, especially in the U.S., where full-price boots and our core 1460 boot were back in growth," Nwokorie told analysts, referring to the company's most recognisable boot.
Revenue from full-price retail sales in the United States - the company's biggest market - rose 14% in the year ended March 29, it said.
Weak European Demand
WEAK EUROPEAN DEMAND
Revenue from the Europe, Middle East and Africa region, however, declined 1.7%, as a broad downturn from the economic fallout of the Iran war hit consumer spending.
"The U.S. consumer has been more resilient than the UK and German consumer," Nwokorie said, adding that shoppers in those European markets were more discount-oriented.
Financial Management and Outlook
Finance chief Giles Wilson said the company currently has no plans to raise prices, with any potential freight-related fuel surcharges to be absorbed within existing costs.
Dr Martens, which also sells sandals and bags, said total annual adjusted pre-tax profit rose 61.3% to 55 million pounds ($73.78 million), beating a consensus of 51 million pounds and rebounding from a 65% decline a year earlier.
Revenue, however, slipped 2.9% to 764.9 million pounds.
Analyst Commentary and Future Expectations
Analysts at Berenberg and eToro highlighted the company's profit recovery and said it was moving to a more sustainable growth phase.
Dr Martens said it expected "further strong profit" growth this year.
($1 = 0.7454 pounds)
(Reporting by Yamini Kalia in Bengaluru; Editing by Mrigank Dhaniwala and Susan Fenton)
