Dr Martens PLC (LSE:DOCS) reduced full-year profit guidance for the second time in three months after costs to tackle operational issues at its LA distribution centre proved higher than expected and wholesale revenue softer than forecast.
As a result, the footwear retailer now expects financial year 2023 EBITDA of around £245mln, down slightly from guidance issued in January of between £250mln and £260mln.
The maker of Airwair boots said fourth-quarter revenue climbed 6%, driven by strong direct-to-consumer (DTC) growth in EMEA and APAC, offset in part by continued soft DTC growth in America.
But wholesale revenue was down in the period due mainly to the LA distribution centre (DC) operational issues offset in part by growth in EMEA.
For the full year, revenue growth was 10% with DTC up 16% and wholesale up 4%.
Actions have been taken to resolve issues at the LA DC, which began impacting our America wholesale channel from December.
Three temporary warehouses were opened to release excess shipping containers and store stock away from the LA DC and a third shift added to focus on the additional work required to unblock the bottleneck.
As a result, shipment volumes at the LA DC are now back to normal levels.
But costs associated with this were around £15mln higher than the £8mln to £11mln initially expected.
Dr Martens held guidance for financial year 2024 revenue growth of mid to high single digits on a constant currency basis and expects extra costs associated with the LA DC to be around £15mln.
The company also announced the retirement of the current chief financial officer, Jon Mortimore.
Mortimore will continue in his role until a successor is in place to ensure a smooth transfer.