Despite Shipping Delays, Dr. Martens Revenue Rises in First Half

Dr. Martens Plc saw a slight dip in its stock on Thursday morning after it warned that shipping delays in the U.S. would continue into next year. Despite this news, the UK-based footwear company reported strong results for the first six months of fiscal year 2022. Revenue was up 16% to £369.9 million, or $487.9 million at current exchange, in the first half, while profit before tax was also up 46% to £61.3 million, or $80.89 million.

Notably, the first six months also resulted in DTC growing to 40% of revenue, driven by retail recovery and strong e-commerce performance with continued double-digit growth. Plus, wholesale revenues grew by 6%, despite the impact in the second quarter by supply chain disruption which delayed approximately £20 million of revenue into the second half.

“We benefited from our decision to enter the year with relatively high inventory levels, meaning that availability was less affected overall,” Dr. Martens CEO Kenny Wilson said in a statement. “In addition, the continuity and carryover nature of the majority of our product range also reduced the impact from supply chain disruption.”

“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,” Wilson added. “Our Americas performance was again particularly strong, notwithstanding our wholesale business here being most impacted by these delays.”

The company said that it sold 6.3 million pairs of boots, shoes and sandals in the first half of the year, up 13%, or 700,000 pairs, year-over-year. Dr. Martens also said that it opened 13 new stores in the same time period including its first store in Barcelona, Spain, taking the total to 147. The company said it plans to open 20 to 25 stores this fiscal year.

Looking ahead, the British boot maker said it remains confident in achieving market expectations for fiscal 2022. “This assumes that we do not experience material country-wide lockdowns on either the demand or supply side for a significant period of time,” it said in a statement.

From fiscal year 2023 and over the medium-term Dr. Martens said it continues to anticipate mid-teens revenue growth and are targeting e-commerce to grow to at least 40% mix, with total DTC, including retail, of at least 60% mix. Its medium-term target of a 30% EBITDA margin is also unchanged.

“Our strong first half performance combined with the continued momentum in DTC trading into the second half gives us confidence in achieving market expectations for the full year,” added Wilson. “I remain hugely excited about the growth potential of the Dr. Martens brand.”

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