Dr Martens profits rise on strong global growth, predicts more to come

By

Sandra Halliday

Published
Oct 22, 2018

Dr Martens was upbeat on Monday, reporting "progress against all strategic priorities as the power of the brand continues to achieve strong and sustainable, global growth.”

The footwear label’s full-year figures in the 12 months to March 31 saw it delivering double-digit revenue and EBITDA growth across all regions, with the EMEA region performing “very strongly” and the company making “significant progress against its strategic priorities, particularly in growing its direct-to-consumer [DtC] channels.”

So what were the actual figures? Revenue rose 20% to £348.6m with good growth across all channels, and like-for-like retail revenue rose 7%. Profit on an EBITDA basis was up 33% to £50m and the EBITDA margin rose 1.4bps to 14.3%.

Within this, DtC was up 26% to £140.7m, retail revenue rose 23% to £97.1m, e-commerce revenue soared 35% to £43.6m and wholesale revenue was up 16% to £207.9m.

The firm’s DtC channels now account for 40% of total revenue, up from 38% in 2017.

While the like-for-like retail revenue rise of 7% might seem tame compared to some of those figures, in the current environment, it’s a stunning increase and the company said it shows its “commitment to consumer-centricity in our existing store base.”

So it’s no surprise that the firm is committed to continued investment in its stores, with 25 openings in the year in “key target locations” including nine in the UK. 

But it also opened seven across mainland Europe, three in New York and three in Japan and relaunched the brand in China during the year, with new online and offline partners. This focus on international markets paid off with “all regions seeing double-digit increases in revenue and EBITDA.” The firm said “performance in EMEA was excellent, with sales up 32% to £155.9m and EBITDA up 45% to £24.9m.”

Meanwhile, the wholesale boost was “the result of increased focus on larger, ‘best fit, partner’ accounts.”

Chairman Paul Mason hailed “a fantastic year” and said that “in the context of the wider macroeconomic uncertainty that exists in a few of our key markets, [it] is testament to both the strength of our brand, our heritage and consumer proposition and the execution of our strategy.”

He added that there’s “still significant scope for growth across our markets, particularly via our direct-to-consumer channels, and this will remain a strategic priority in the years ahead. “

CEO Kenny Wilson added that his first few months at the business “have been thoroughly inspiring. We have an amazing culture and the opportunity for growth is significant.”