Q3 revenue below expectations for Dr Martens

Worldwide
Published:  19 January, 2023
Credit: Dr Martens

Dr Martens has reported its financial results for the third quarter of the current financial year, with lower-than-expected revenue.

The company reported Q3 revenue of £335.9 million (US$414.4 million), an increase of 9% year-on-year, which it attributed to slower-than-anticipated direct-to-consumer (DTC) growth in America and the impact of significant operational issues at its new Los Angeles distribution centre.

The third quarter was led by strong retail growth at 21%, resulting in a DTC revenue mix of 65%, while e-commerce growth was 5%, wholesale growth was 7% and DTC growth was 11%.

For the year so far, Dr Martens achieved revenue growth of 12% to reach a total of £754.5 million (US$930.7 million). By channel, year-to-date growth was 6% for e-commerce, 29% for retail, 15% for DTC and 8% for wholesale.

Regionally, Q3 revenue grew by 8% in EMEA, with the company noting that DTC growth built through the quarter, ending on a strong December. In North America, revenue growth was 16%, while APAC revenue dropped by 4% primarily due to issues in China.

Due to operational issues at the company’s new LA distribution centre, Dr Martens estimates that lost wholesale revenue and incurred costs will impact the full 2023 EBITDA by £16-25 million (US$19.7-30.8 million). Because of this and other issues, Dr Martens is forecasting lower revenue growth for the full financial year at 11-13%, with EBITDA expected to be between £250-260 million (US$308-321 million).