ii view: Dr Martens shares take big step lower

Third-quarter trading update to 28 December

• Currency adjusted revenue down 2.7% to £253 million
• Direct to Consumer (DTC) revenue down 6.5%
• Wholesale revenue up 9.5%

Chief executive Ije Nwokorie

"This is a year of pivot, as we make the necessary changes to our business to set us up for future sustainable growth. I remain laser focused on executing our new strategy.”

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ii round-up:

Dr. Martens Ordinary Shares (LSE:DOCS) today predicted broadly flat annual sales as the maker of the iconic DM boots looks to reduce discounted promotional sales in an effort to boost profits. 

Currency-adjusted third-quarter sales to late December fell 2.7% to £253 million, leaving year-to-date sales on the same basis down 0.7% at £580 million. The maker of footwear and accessories such as bags continues to expect a significant year-over-year improvement in pre-tax profits.

Shares in the FTSE 250 company plunged 13% in UK trading having come into this latest news up by close to a tenth in 2025. That’s similar to the FTSE 250 last year. Sporting goods maker Nike Inc Class B (NYSE:NKE) fell 16% in 2025. 

Dr Martens operates in more than 60 countries globally with former Apple Inc (NASDAQ:AAPL) executive Ije Nwokorie taking charge in January last year. 

Direct-to-Consumer (DTC) revenues for the quarter fell 6.5%, leaving sales via its own stores and websites down 3.3% for the first nine months of its financial year. 

Sales via other retailers or the wholesale avenue improved 9.5% during the quarter with year-to-date sales up 4.2%. 

Geographically, for the nine-month period, a 4.5% currency adjusted gain for the US-focused Americas region sits against a fall of the same size for its EMEA (Europe, the Middle East, and Africa) business. 

A full-year trading update may be announced mid-April with annual results likely early to mid-June. 

ii view:

Boot maker Dr Martens was founded in 1960 in Northamptonshire. Today it employs over 3,500 people across both the UK and overseas. During its last financial year, DTC sales accounted for almost two-thirds of total revenues, with DTC sales split almost evenly between its own retail stores and online sales. Wholesale made up the balance. 

Geographically, EMEA generated most sales over its last fiscal year at almost a half, the Americas came next at just over a third, with Asia Pacific the balance at just over a tenth.

For investors, the broader backdrop for consumers across the UK and Europe remains tough with taxes generally on the rise. The high fashion nature of the company’s products cannot be overlooked. Group net debt of £302 million as of late September compares to a stock market value of under £650 million, while ongoing changes in US trade tariffs offer room for further headwinds given boots are made outside of the US.   

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On the upside, a reinvigorated strategy now includes focuses on product innovation, full priced product sales and expanded geographical locations. Cost savings were previously highlighted as countering some trade tariff impacts. A failure by management to oversee a recovery could attract the attention of a major fashion house to the group’s brand. A focus on lowering group debt is being pursued, while an forecast dividend yield of over 3% is not to be ignored.  

In all, the group’s reinvigorated strategy deserves more time, although more cautious investors are likely to stay side-lined given few signs of a sustainable recovery. 

Positives: 

• Geographical diversity
• Refreshed strategy

Negatives:

• Pressured consumer spending
• Exposure to currency movements

The average rating of stock market analysts:

Strong hold