Stocks in UK’s Dr Martens (DOCS) fall despite profit hike
By Rob Griffin
12:07, 9 December 2021
Stocks in Dr Martens fell sharply today – even after the iconic UK boot manufacturer enjoyed bumper increases in first-half sales and profits.
The London-based company achieved pre-tax profits of £61.3 for the six months ending 30 September 2021 – 46% up of the same period last year, the company announced on Thursday.
But it warned that its US wholesale business continued to be hit by shipping delays that are expected to continue into the next financial year.
Strong first-half performance
Despite the generally positive statement, the company’s stock price fell 5% to 381.2p before noon in London.
Chief executive Kenny Wilson attributed the performance to the strength of the business model, the under penetration of the brand globally, and agility in adapting to changing conditions.
“Our strong first-half performance, combined with the continued momentum in DTC (direct to consumer) trading into the second half gives us confidence in achieving market expectations for the full year,” he said. “I remain hugely excited about the growth potential of the Dr Martens brand.”
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Higher inventory levels
The company’s statement also showed a 16% on-year increase in revenue to £369.9m, while the earnings per share came in at 4.8p.
Wilson highlighted the decision to enter the year with higher inventory levels, which he said was made possible by the continuity of the product and the supplier relationships.
“This meant that DTC availability levels remained relatively high and gross margin was not impacted, despite the supply chain disruption and global shipping delays experienced across the industry,” he added.
The company said that the momentum seen in retail during the first half has continued to strengthen during October and November, while e-commerce also remained strong.
“We remain confident in achieving market expectations for full-year 2022,” it stated.
In addition, the company is targeting mid-teens revenue growth from full-year 2023 and over the medium term.
Read more: Dr Martens annual revenue kicked up 15%
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