Dr. Martens lowers profit outlook, announces CFO retirement

Dr. Martens expects FY23 EBITDA to be around 245 million pounds due to higher costs at LA DC (Los Angeles distribution centre) and lower wholesale revenue.

The company also announced that its chief financial officer Jon Mortimore has decided to retire from his role and he will continue to hold the position until a successor is in place.

“We took decisive action to tackle the operational issues at our LA DC with shipments now back to normal levels. However, costs associated with resolving these issues were higher than our initial estimates which, in conjunction with softer Q4 wholesale revenue, means we expect EBITDA for the year to be around 245 million pounds,” said Kenny Wilson, chief executive officer, Dr Martens.

“We continue to adopt a custodian mindset, taking decisions in the best long-term interests of all our stakeholders, and I believe firmly in the DOCS strategy, the continued strength of the Dr. Martens brand and the medium to long-term growth potential of the business,” Wilson added.

Highlights of Dr. Marten’s Q4 results

The company's fourth quarter revenue was up 6 percent and flat in constant currency (CC) driven by strong direct-to-consumer (DTC) growth in EMEA and APAC, offset in part by continued soft DTC in America. For the full year, revenue growth was 10 percent or 4 percent CC.

Wholesale revenue was down due to the LA distribution centre (DC) operational issues and planned shipment reduction to the company’s China distributor, offset in part by growth in EMEA.

Fourth quarter DTC revenues grew 20 percent or 13 CC, with wholesale down 4 percent or or down 11 percent CC. Within DTC, retail grew 36 percent or 28 percent CC and ecommerce grew 8 percent or 2 percent CC.

For the full year, , DTC was up 16 percent or 11 percent CC and wholesale was up 4 percent or down 3 percent CC. Within DTC, retail was up 30 percent or 25 percent CC and ecommerce was up 6 percent or 1 percent CC.

The company added that in FY23, total incremental costs associated with the LA DC were 15 million pounds, higher than the 8 to 11 million pounds expected initially, due mainly to higher than anticipated container costs.

The company is maintaining FY24 revenue growth guidance of mid to high single digits on a constant currency basis.

Dr. Marten’s CFO Jon Mortimore to retire

Jon Mortimore, the company added, joined the company in April 2016 and during his seven years at Dr. Martens, he has been instrumental in delivering the company’s transition from a family-run company to a listed PLC, overseeing revenue growth from 230 million pound to 1 billion pounds, as well as playing an integral role in the company’s initial public offering (IPO) in January 2021.

Commenting on Mortimore’s retirement, Paul Mason, Dr. Martens chair said: “On behalf of the board, I would like to thank Jon for his central role in driving the strong growth and strategic development of Dr. Martens over the last seven years. We wish him well in his retirement.”

“I am proud of the progress that Dr. Martens has achieved during my time as CFO since 2016 and I look forward to seeing further growth and success in the years to come,” Mortimore added