February 25, 2024

Dr. Martens Reaches 1 Billion Pounds in Annual Revenue for First Time

Dr. Martens is marking a new milestone – reaching 1 billion British pounds ($1.25 billion, based on current exchange) in annual revenue for the first time.

CEO Kenny Wilson said in a statement that reaching this milestone is “testament to the strength” of the brand, the long-standing “DOCS” strategy and the hard work and dedication of its employees globally. “We are focused on the successful execution of our proven DOCS strategy, which we will underpin with continued investment in the business and our people to support our increasing scale and capitalise on our iconic brand’s strength,” Wilson said.

The British footwear company reported that revenue grew 10 percent in fiscal year 2023 to 1 billion pounds ($1.25 billion), up from 908.3 million pounds ($1.1 billion) in 2022. Dr. Martens noted that it sold 13.8 million pairs of shoes in the year, down 2 percent on the previous year.

By channel, direct-to-consumer, which was up 16 percent to 520.7 million pounds ($652.7 million) for the year, is now more than half of the company’s revenue. Wholesale was up 4 percent to 479.6 million pounds ($601.2 million) for the year.

Regionally, Dr. Martens stumbled in the U.S. following several “operational mistakes” in the region. Wilson noted in a statement that against the backdrop of a challenging consumer environment, the company “poorly implemented” the move of its main west coast distribution center from Portland, Ore. to Los Angeles, Calif., which affected fourth-quarter wholesale shipments.

Wilson also said the company made mistakes executing its marketing campaigns in the U.S., which were too focused on shoes and sandals, which grew well, but not focused enough on boots. This led to boots revenue declining in America and holding back overall boot sales for the company. “In addition, our e-commerce execution wasn’t strong enough,” Wilson said. “This weaker than planned performance in America meant that at Group level the price increases we put through didn’t offset fully cost inflation.”

What’s more, the executive noted that Dr. Martens ordered too much inventory for America given the tough environment. However, the inventory in America is predominantly best-selling, continuity, black boots and shoes so, while it will take until the second-half of fiscal 2024 to right-size inventory levels, there is minimal markdown risk, Wilson said.

“We have undertaken detailed reviews to understand why these issues occurred and have begun to embed the lessons learned into the business,” Wilson said. “We are fixing the issues in America, including a significant strengthening of the team there, and returning America to good growth is our number one operational priority.”

Conversely, Dr. Martens did see much success in the EMEA region and its home market of the UK. “We’ve also seen good momentum in Japan, where we transferred 14 franchise stores successfully to owned and operated towards the year end,” Wilson said. Japan’s wins were partially offset by the company’s decision to stop sales to its China distributor ahead of agreement end.

Across product categories, Wilson noted that the company saw “good growth” in shoes (51 percent) and sandals (54 percent) across all regions, although boots were down 10 percent in the year. Moving ahead, the company said it will continue to focus growth in its big three franchises – the 1460 boot, the 1461 shoe and the Chelsea boot.

Looking ahead, the company expects revenue and profit to be more weighted towards the second half of fiscal 2024 than normal. The first half of the year’s revenue is expected to be broadly in line with the same time period of fiscal 2023. For the full fiscal year 2024, Dr. Martens expects mid to high single-digit revenue growth.

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