Dr Martens sees profits slide but on track for return to growth

Dr Martens has revealed annual profits slumped as sales came under pressure and it cautioned over ongoing falling revenues in the UK.

The footwear group reported pre-tax profits of £8.8 million for the year to March 30, down from £93 million the previous year, after seeing sales fall 10%.

On an underlying basis, pre-tax profits slumped to £34.1 million from £97.2 million.

The group said sales to consumers in the US returned to growth in the second half of the year and have continued to increase, but revealed UK revenues have remained lower since the year-end “due to a challenging market”.

It added that unfavourable foreign exchange rates would see it take a hit to group sales and profits of around £18 million and £3 million respectively in 2025-26.

Despite this, Dr Martens said it expects underlying profits to rise “significantly” over the financial year ahead, with analysts expecting a jump to between £54 million and £74 million.

This helped shares surge 24% higher in afternoon trading on Thursday.

It flagged uncertainty over the impact of higher tariffs, but said it was holding off from price hikes for the remainder of 2025.

Its stock is already in the US market for the spring/summer season and either there or already being shipped for the autumn/winter.

But the group makes the bulk of its footwear in Vietnam, which is facing a 46% reciprocal US tariff, set to come into effect in July.

“We do however recognise that there is continued macroeconomic uncertainty and the full outcome of tariffs is still unknown, and we will monitor this closely through the year and take action as appropriate,” the group said.

The Northamptonshire-based company outlined new plans for growth alongside its results, with aims to attract new shoppers and hold off from discounts in EMEA and the Americas.

The firm’s annual figures showed sales sales dropped 11.4% over the year, although retail lifted 1% in the final six months.

In the Europe, Middle East and Africa (EMEA) region, sales fell 11%, with direct-to-consumer difficult amid a highly promotional market – particularly in the UK.

New chief executive Ije Nwokorie told the PA news agency the UK market had been tough as competitors have resorted to steep discounting to drive sales, but said the firm would not go “chasing after that”.

He said British shoppers were reluctant to pay full price in the current market.

He told PA: “People are genuinely after a deal.

“We’re seeing people making decisions to go for a discount option rather than paying full price.”

The company, whose yellow-stitched boots have been a retro mainstay for decades, has been in the doldrums in recent years, with declining revenues exacerbated by the cost-of-living crisis.

It listed on the London Stock Exchange in 2021, and has since issued a slew of profit warnings and replaced its chief executive.

Many of Dr Martens’ recent problems have come from steep declines in sales in the US, but Mr Nwokorie said the group had stabilised in the past year.

He said: “Our single focus in 2024-25 was to bring stability back to Dr Martens.

“We have achieved this by returning our direct-to-consumer channel in the Americas back to growth, resetting our marketing approach to focus relentlessly on our products, delivering cost savings and significantly strengthening our balance sheet.”

Susannah Streeter, head of money and markets at Hargreaves Lansdown, said there was investor optimism that Dr Martens can “kick off a sustained recovery”.