25 January 2024
Dr. Martens
plc
Trading statement for the
three months ended 31 December 2023
"Our Q3 performance is in line with the updated full year
guidance provided in November. Q3 DTC revenue declined by 3%
(constant currency, "CC") and wholesale was down 46% CC, resulting
in Group revenue down 18% CC. This was driven by a weak USA
performance, as expected. Trading in the quarter was volatile and
we saw a softer December in line with trends across the industry.
Whilst the consumer environment remains challenging, we are taking
action to continue to grow our iconic brand and invest in our
business. We remain confident in our product pipeline for AW24 and
beyond."
Kenny Wilson, Chief Executive Officer
Q3
results - at a glance
|
Q3
|
YTD
|
|
Reported
|
CC
|
Reported
|
CC
|
Group revenue (£m)
|
267.1
|
273.8
|
662.9
|
681.9
|
Change year-on-year
|
(21%)
|
(18%)
|
(12%)
|
(10%)
|
|
|
|
|
|
By channel: change
year-on-year
|
|
|
|
|
Ecommerce
|
(9%)
|
(8%)
|
(4%)
|
(2%)
|
Retail
|
-
|
3%
|
7%
|
10%
|
DTC
|
(5%)
|
(3%)
|
1%
|
3%
|
Wholesale
|
(49%)
|
(46%)
|
(27%)
|
(25%)
|
|
|
|
|
|
DTC mix
|
77%
|
|
61%
|
|
%pts year-on-year
|
+12pts
|
|
+8pts
|
|
|
|
|
|
|
Channel Performance
Ecommerce revenue declined by 9%
reported, or 8% CC. This was driven by Americas, where ecommerce
revenues were down double-digit, with EMEA recording marginal
growth and APAC slightly down year-on-year.
Retail revenue was flat on a
reported basis and up 3% CC. We achieved a double-digit growth in
APAC driven by Japan, solid growth in EMEA and declining revenue
driven by continued weak footfall in USA, as
anticipated.
During the quarter we opened 13 new
stores across EMEA and APAC. At the end of Q3 we had 235 own stores
globally, having opened 38 stores YTD and closed seven.
Wholesale revenue declined by 49%
reported, or 46% CC; significant decline was seen in both Americas
and EMEA, in line with both our expectations and the assumptions
within our FY24 guidance. Wholesale customers continue to have
relatively low levels of in-market inventory, however the timing
and level of re-orders is unpredictable, meaning that our
visibility over wholesale remains weak.
Regional Performance
EMEA DTC revenue grew low
single-digit in Q3, with a weaker October, impacted by abnormally
warm weather conditions, a strong November and a softer December.
We saw a good DTC performance in our continental European
conversion markets with a slightly softer result in the UK in line
with industry trends. EMEA wholesale declined significantly as
planned, due to both the reduction of sales
to etailers, together with differences in the phasing of some
orders. Overall EMEA revenue declined by 15%
year-on-year, on both a reported and CC basis, driven by the
wholesale performance.
Given the weak consumer backdrop,
the performance of our Americas business was challenging, as
expected. We recorded a double-digit decline in DTC revenue, with
softer ecommerce and low footfall. Wholesale revenues broadly
halved year-on-year as continued caution from wholesale customers
resulted in a weak order book. Overall, Americas revenue was down
31% reported, or 26% CC. The new Americas leadership team continue
to take action, particularly in marketing execution and ecommerce
trading capabilities, to drive revenue and grow the
brand.
APAC recorded revenue down 8%
reported, or 1% CC. Japan, our largest market in the region,
delivered good growth overall, with the relative DTC and wholesale
performance driven by the transfer of 14 franchise stores at the
end of FY23.
Outlook
The guidance provided at the time of
our H1 results, for full year CC revenue decline of high
single-digit percentage year-on-year, remains unchanged. All other
guidance for FY24 also remains unchanged. The appreciation of
sterling since the end of H1 means that, if current FX rates
persist, we anticipate a currency headwind to the P&L of
approximately £5m, together with a non-cash Balance Sheet
translation charge, also of approximately £5m.
QUARTERLY REVENUE PERFORMANCE
Year
on Year Change (unaudited)
|
Q1
|
Q2
|
Q3
|
FY24 YTD
|
|
|
|
Reported
|
CC
|
Reported
|
CC
|
Reported
|
CC
|
Reported
|
CC
|
|
Total revenue
|
(11%)
|
(11%)
|
(2%)
|
1%
|
(21%)
|
(18%)
|
(12%)
|
(10%)
|
|
|
|
|
|
|
|
|
|
|
Revenue:
|
Ecommerce
|
7%
|
7%
|
-
|
4%
|
(9%)
|
(8%)
|
(4%)
|
(2%)
|
|
|
Retail
|
27%
|
27%
|
6%
|
10%
|
-
|
3%
|
7%
|
10%
|
|
|
DTC
|
17%
|
17%
|
3%
|
7%
|
(5%)
|
(3%)
|
1%
|
3%
|
|
|
Wholesale1
|
(41%)
|
(41%)
|
(5%)
|
(2%)
|
(49%)
|
(46%)
|
(27%)
|
(25%)
|
|
|
|
|
|
|
|
|
|
|
|
|
Region:
|
EMEA
|
(1%)
|
(3%)
|
14%
|
13%
|
(15%)
|
(15%)
|
(2%)
|
(3%)
|
|
|
Americas
|
(26%)
|
(27%)
|
(12%)
|
(6%)
|
(31%)
|
(26%)
|
(24%)
|
(20%)
|
|
|
APAC
|
12%
|
16%
|
(22%)
|
(14%)
|
(8%)
|
(1%)
|
(9%)
|
(2%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
1. Wholesale
revenue including distributor customers.
Enquiries
Investors and analysts
Bethany Barnes, Director of Investor
Relations
Bethany.Barnes@drmartens.com
+44 7825 187465
Beth Callum, Senior Investor
Relations
Analyst
Beth.Callum@drmartens.com
Press
H/Advisors
Maitland
+44 20 7379 5151
Clinton
Manning
+44 7711 972662
Katharine
Spence
+44 7384 535739
Gill Hammond, Director of
Communications
+44 7384 214248
Investor and Analyst conference call
Kenny Wilson, CEO and Jon Mortimore,
CFO will host a conference call and Q&A for investors and
analysts at 09:00 GMT on 25 January 2024. This can be accessed
via https://www.drmartensplc.com.
About Dr. Martens
Dr. Martens is an iconic British
brand founded in 1960 in Northamptonshire. Produced originally for
workers looking for tough, durable boots, the brand was quickly
adopted by diverse youth subcultures and associated musical
movements. Dr. Martens has since transcended its working-class
roots while still celebrating its proud heritage and, six decades
later, "Docs" or "DM's" are worn by people around the world who use
them as a symbol of empowerment and their own individual attitude.
The Company listed on the main market of the London Stock Exchange
on 29 January 2021 (DOCS.L) and is a constituent of the FTSE 250
index.
Cautionary statement relating
to forward-looking statements
Announcements, presentations to investors, or other documents
or reports filed with or furnished to the London Stock Exchange
(LSE) and any other written information released, or oral
statements made, to the public in the future by or on behalf of Dr.
Martens plc and it group companies ("the Group"), may contain
forward-looking statements.
Forward-looking statements give the Group's current
expectations or forecasts of future events. An investor can
identify these statements by the fact that they do not relate
strictly to historical or current facts. They use words such as
'aim', 'ambition', 'anticipate', 'estimate', 'expect', 'intend',
'will', 'project', 'plan', 'believe', 'target' and other words and
terms of similar meaning in connection with any discussion of
future operating or financial performance. In particular, these
include statements relating to future actions, future performance
or results of current and anticipated products, expenses, the
outcome of contingencies such as legal proceedings, dividend
payments and financial results. Other than in accordance with its
legal or regulatory obligations (including under the Market Abuse
Regulation, the UK Listing Rules and the Disclosure and
Transparency Rules of the Financial Conduct Authority), the Group
undertakes no obligation to update any forward-looking statements,
whether as a result of new information, future events or otherwise.
The reader should, however, consult any additional disclosures that
the Group may make in any documents which it publishes and/or files
with the LSE. All readers, wherever located, should take note of
these disclosures. Accordingly, no assurance can be given that any
particular expectation will be met and investors are cautioned not
to place undue reliance on the forward-looking
statements.
Forward-looking statements are subject to assumptions,
inherent risks and uncertainties, many of which relate to factors
that are beyond the Group's control or precise estimate. The Group
cautions investors that a number of important factors, including
those referred to in this document, could cause actual results to
differ materially from those expressed or implied in any
forward-looking statement. Any forward-looking statements made by
or on behalf of the Group speak only as of the date they are made
and are based upon the knowledge and information available to the
Directors on the date of this report.