Interactive Investor

ii view: big step up for Dr Martens shares

14th April 2023 11:34

by Keith Bowman from interactive investor

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Shares in this iconic British brand have fallen year-to-date, but is that about to change? We assess prospects.


Full-year trading update to 31 March

  • Currency adjusted revenue up 4%
  • Now expects adjusted profit (EBITDA) of £245 million, down from a previous £250-£260 million

Chief executive Kenny Wilson said:

“We took decisive action to tackle the operational issues at our LA DC with shipments now back to normal levels.

“I believe firmly in the DOCS strategy, the continued strength of the Dr. Martens brand and the medium to long-term growth potential of the business.”

ii round-up:

Boot maker Dr. Martens Ordinary Shares (LSE:DOCS) today lowered its full-year profit estimate given higher-than-expected costs needed to fix problems at its Los Angeles distribution centre, but maintained its year ahead sales guidance. 

Good progress was flagged in resolving operational issues at its US hub, but with costs of £15 million above its prior estimate of up to £11 million. That reduces expected full-year adjusted profit to £245 million from January’s forecast of £250-£260 million. 

Shares in the FTSE 250 company rose by more than 9% in UK trading having come into this latest news down by around a quarter year-to-date. Shares for fellow personal goods company Watches of Switzerland Group (LSE:WOSG) have fallen by a tenth during 2023, while shares for luxury apparel retailer Burberry Group (LSE:BRBY) are up by a quarter. 

Sales for the year ahead are still expected to materialise in the mid to high single digit region on a currency adjusted basis, potentially up from the 4% growth achieved over the year just gone.

Direct-to-Consumer (DTC) adjusted sales growth of 11% for the past year countered a fall of 3% for the Wholesale business, hindered by challenges in LA. 

The boot maker also announced its chief financial officer Jon Mortimore will step down once a new replacement has been found. 

Full-year results are scheduled for 1 June. 

ii view:

Dr. Martens was founded in 1960 in Northamptonshire. Today it employs over 2,000 people, predominantly focusing its sales effort on seven core markets in the UK, France, Germany, Italy, the USA, Japan, and China. Its strategic focuses include pushing its DTC sales to enhance its brand engagement and improving its operational and IT infrastructure. 

For investors, potential for further operational issues cannot be overlooked. Rising interest rates and a cost-of-living crisis provide a tough backdrop for its customers, costs generally for businesses remain elevated, while the high fashion nature of the company’s product continues to warrant consideration.

More favourably, sales have grown over this latest year, including growth for both its retail and ecommerce businesses under its DTC division. Investment is being made in new stores, marketing and technology, the business held cash of £158 million at the end of March, while a forecast dividend yield of around 4% is not to be ignored. 

For now, and while this latest announcement offers hope and may tempt investors with a higher appetite for risk, more cautious investors may wish to await signs of profit recovery before taking any action. 


  • Geographical diversity
  • Growing Direct to Consumer sales


  • Consumer cost-of-living crisis
  • Exposure to currency movements

The average rating of stock market analysts:


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