Dr. Martens plc (LON:DOCS) has announced its preliminary results for the year ended 31 March 2024
“Our FY24 results were as expected and reflect continued weak USA consumer demand. This particularly impacted our USA wholesale business and offset our Group DTC performance, where pairs grew by 7%. We have achieved robust performances in EMEA and APAC, and our supply chain strategy continues to deliver good savings. We are clear that we need to drive demand in the USA to return to growth in FY26 onwards and are executing a detailed plan to achieve this, with refocused and increased USA marketing investment in the year ahead. We are also announcing a cost action plan across the Group, targeting savings of £20m to £25m. I am confident that the actions we are taking as we enter this year of transition will put us in good shape for the years ahead.”
Kenny Wilson, Dr. Martens Chief Executive Officer
| £m | FY24 | FY23 | % change Actual | % change CC2 |
| Revenue | 877.1 | 1,000.3 | -12.3% | -9.8% |
| DTC revenue mix | 61% | 52% | +9pts | |
| EBITDA1 | 197.5 | 245.0 | -19.4% | |
| EBITDA margin | 22.5% | 24.5% | -2.0pts | |
| EBIT | 122.2 | 176.2 | -30.6% | |
| Profit Before Tax (before FX) 1 | 97.2 | 170.1 | -42.9% | |
| Profit After Tax | 69.2 | 128.9 | -46.3% | |
| Basic EPS (p) | 7.0 | 12.9 | -45.7% | |
| Net Debt1 | 357.5 | 288.3 | ||
| Dividend per share (p) | 2.55 | 5.84 |
1. Alternative Performance Measure (APM) as defined in the Glossary on pages 66 and 67.
2. Constant currency applies the same exchange rate to the FY23 and FY24 results, based on FY23 budgeted rates
· Revenue down 12% (10% constant currency (CC)), with DTC revenue up 2% (5% CC) offset by Wholesale revenue down 28% (26%CC) primarily driven by USA wholesale
· Within DTC, Retail revenue was up 6% (10% CC) and ecommerce was broadly flat (down 1% or up 1% CC)
· By region:
o EMEA revenue was down 3% (actual and CC), with 12% growth in DTC offset by wholesale decline, driven predominantly by the planned strategic decision to reduce volumes into EMEA etailers
o Americas revenue declined 24% (20% CC) driven by wholesale
o APAC revenue was broadly flat (down 7% or up 1% CC) driven by good growth in Japan
· Strong performance in shoes and sandals, with DTC pairs in both categories growing over 20% year-on-year, showing the continued strength of the brand
· Opened 35 net new own stores globally, with the majority of these being in continental Europe and APAC
· Successful supply chain strategy delivered continued savings, supporting gross margins which increased 3.8%pts to 65.6%
· Continued investment into IT systems including the Customer Data Platform and Supply and Demand Planning Systems, which will generate benefits FY26 onwards
· Profit before tax (before FX losses) of £97.2m, down 43% driven by the decline in EBITDA together with increased Depreciation & Amortisation
· Further strides made in Sustainability with the launch of UK Authorised Repair, USA ReWair and our first products made from reclaimed leather
· Net Debt increased to £357.5m (FY23: £288.3m) due to returns to shareholders, lower profits and increased lease liabilities. Inventory was flat year-on-year, in line with expectations
· The Board proposes a final dividend of 0.99p, taking the total dividend to 2.55p, equating to a 35% earnings payout. The Board’s intention is to hold the FY25 dividend flat in absolute terms, before returning to an earnings payout in line with our dividend policy (of 25% to 35% payout) in FY26 onwards
Current trading and guidance
Current trading is in line with our expectations and our planning assumptions for FY25 are unchanged from those shared in our announcement on 16th April. There remains a wide range of potential outcomes for both revenue and profit for the year, dependent on the performance through the key peak trading period. For the first half, we expect a Group revenue decline of around 20%, driven by wholesale revenues down around a third. Combined with the cost headwinds which impact both halves, the impact of operational deleverage is significantly more pronounced in the first half. Overall results this year will therefore be very second-half weighted, particularly from a profit perspective.
Presentation of full year results
Kenny Wilson, CEO and Giles Wilson, CFO will be presenting the FY24 results at 09:30 (UK time) on 30 May 2024. The presentation will be streamed live and the link to join is https://www.drmartensplc.com. A playback of the presentation will be available on our corporate website after the event, at https://www.drmartensplc.com/investors/results-centre.
