Dr. Martens plc (LON:DOCS) has announced its first half results for the 26 weeks ended 29 September 2024.
RESULTS IN LINE WITH EXPECTATIONS AND DELIVERING ON OUR STRATEGIC OBJECTIVES
“Our first half performance was in line with expectations and we remain confident in our ability to deliver on our plans and the targets we set for FY25. As we shared in May, this is a year of transition and we have made good progress with our four main objectives: pivot our marketing to a relentless focus on our product, turn around our USA DTC performance, reduce our operating cost base and strengthen the balance sheet. Our new marketing campaigns are showing encouraging early signs, with strong sales of new product, giving us confidence that we will return USA DTC to positive growth in the second half. We took swift action to implement cost savings and now anticipate the benefit of this in FY26 to be at the top of the previous guidance range of £20-£25m, alongside an ongoing focus on tight cost control throughout the business. We have delivered a significant reduction in both inventory and net debt, together with successfully refinancing our debt facilities. The early success of our new product ranges provides a strong foundation as we enter the important peak trading period and as I prepare to hand over the reins to Ije in the new year.”
Kenny Wilson, Dr. Martens Chief Executive Officer
| £m | H1 FY25Reported | H1 FY25CC2 | H1 FY24Reported | % changeActual | % changeCC2 |
| Revenue | 324.6 | 332.1 | 395.8 | -18% | -16% |
| DTC revenue mix | 56.4% | 56.4% | 49.6% | +6.8pts | +6.8pts |
| Adjusted EBIT1,3 | (4.3) | (2.4) | 39.7 | ||
| Adjusted PBT1,3 | (17.9) | (16.1) | 25.2 | ||
| PBT | (28.7) | (27.0) | 25.8 | ||
| Adjusted EPS1,3 | (1.3) | (1.1) | 1.9 | ||
| EPS (p) | (2.2) | (2.0) | 1.9 | ||
| Net Debt1 (including leases) | 348.7 | N/A | 478.9 | -27% | |
| Dividend per share (p) | 0.85 | N/A | 1.56 |
1. Alternative Performance Measure (APM) as defined in the Glossary on pages 29 to 31.
2. Constant currency applies the prior period exchange rates to current period results to remove the impact of FX. Previously, we presented this by applying current period budgeted rates to both the current and prior period.
3. In previous periods EBITDA was presented. However, this has been replaced with EBIT as it is considered a more relevant performance measure for the business. The Group has also introduced the use of adjusted performance measures which are exclusive of the impact of exceptional costs and currency gains/losses. Refer to the Glossary on pages 29 to 31 for further explanation of these changes. Prior period amounts have been updated to reflect this change and were therefore unaudited in the prior periods.
- Revenue down 18% (16% constant currency (CC)), in line with guidance for 20% decline. DTC revenue down 7% (5% CC) and Wholesale revenue down 29% (27%CC), as expected. Within DTC, Retail revenue was down 9% (7% CC) and ecommerce was down 4% (2% CC)
- All regions performed in line with our expectations, with EMEA revenue down 16% (actual and CC), Americas revenue declining 22% (20% CC) and APAC down 12% (7% CC)
- Swift action taken to implement our cost savings plan, which will now deliver £25m in FY26, at the top end of previous guidance. Tight cost control throughout the business, with non-demand generating operating costs down year-on-year
- PBT impacted by reduced revenue, as guided, together with exceptional charges of £9.2m, largely related to our cost savings plan
- Strengthened balance sheet, with significant reduction in both inventory and net debt, in line with our plan. Inventory down £69.1m year-on-year driven by reduced purchases
- Refinance completed successfully, securing a £250.0m loan together with a £126.5m RCF
- Interim dividend of 0.85p, in line with prior guidance
Current trading and guidance
Trading since the start of the AW24 season has been encouraging, with all three regions positive, albeit the peak weeks of trading remain ahead of us. Encouragingly, trading has been driven by good DTC sales of new products supported by our new product-led marketing approach.
Our guidance for FY25 remains unchanged, with results underpinned by the swift cost action taken. In addition, to aid investors’ understanding of the impact of foreign exchange rates on our business, we are providing guidance on this for the first time and will continue to do so going forward. Based on currency spot rates as at 14 November 2024, we expect a currency headwind to results of c.£18m to revenue and c.£6m to PBT for FY25.
Presentation of half year results
Kenny Wilson, CEO and Giles Wilson, CFO will be presenting the H1 FY25 results virtually at 09:00 (UK time) on 28 November 2024 with a live Q&A session for analysts and investors. This can be viewed live on the Dr. Martens plc website 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.
