Dr Martens PLC (LSE:DOCS) shares tumbled 23% to 88p, falling to a new all-time low, after warning that full-year earnings will be below expectations as it now sees a slower recovery in the US.
The iconic bootmaker expects that full-year revenue will decline by a high single-digit percentage compared to last year and that earnings (EBITDA) will be “moderately below” the bottom end of consensus forecasts, with pre-tax profit also impacted by around £5 million higher net finance costs.
Given the macroeconomic uncertainty, the firm also withdrew previous guidance of high single-digit revenue growth in 2025.
Trading in the second half to date has been mixed, with the start of the Autumn/Winter season impacted by warm weather across all three regions and weaker traffic overall, the firm said.
It described the most challenging part within its US business as wholesale, with widespread macro-economic caution amongst wholesale customers resulting in a weaker order book than in prior years.
Chief executive Kenny Wilson said it is likely given the challenging backdrop that it will take longer to see an improvement in US results than initially anticipated.
The warning came as the firm unveiled a 5% drop in revenue in the six months ended September to £395.8 million, down from £418.6 million the year before, while pre-tax profit more than halved to £25.8 million from £57.9 million. The dividend was left unchanged at 1.56p.
The company said wholesale revenue was impacted by planned strategic decisions to reduce volumes into EMEA retailers and the exit of the China distributor, together with a weaker US wholesale performance than previously anticipated.
Dr Martens calculated the consensus for 2024 EBITDA as between £223.7 million and £240.0 million, and the pre-tax profit range from £128.7 million to £148.0 million.
The company's shares, which were floated in 2021 at a price of 370p and hit an early high above 500p, have since found the going much tougher, with a 57% decline in the past 12 months.