Dr Martens PLC said it has cut its revenue and underlying earnings estimates for full-year 2023 (FY23) on a bottleneck at its new Los Angeles distribution centre and weaker-than-anticipated US trading.
It expects the bottleneck to reduce wholesale revenue by £15mln-£25mln and underlying earnings (EBITDA) by £16mln-£25mln, including £8mln-£11mln of supply chain costs.
“We now expect full-year revenue growth of 11-13% on an actual currency basis and full-year EBITDA to be between £250mln and £260mln," noted the footwear maker's chief executive Kenny Wilson in a trading statement.
Dr Martens said it anticipates knock-on effects from the FY23 disruption in FY24 but expects these to normalise in the first half of FY24.
It also said that it expects the more uncertain economic environment to likely impact FY24 revenue growth. The group said it has been reviewing the strategic and economic benefits of continuing to sell into pure play wholesale eCommerce accounts, particularly in EMEA, and as a result, it has decided to reduce volume into these accounts in FY24.
“Over time, the benefit will be to underpin DTC [Direct-to-Consumer] mix expansion but in FY24, revenue growth will be impacted. These factors together lead us to believe FY24 revenue growth will be mid to high single digits on a constant currency basis,” the FTSE 250-listed company said.
Dr Martens said total revenue for the third quarter to end-December 2022 grew by 9%, or 3% on a constant currency basis, but was below its expectations.