Dr Martens PLC (LSE:DOCS) has warned that sales of its iconic shoes will decline dramatically in the year ahead, with US wholesale anticipating a double-digit yearly decline.
The company, whose shares have collapsed nearly 80% since going public in 2021, anticipates a £20 million profit-before-tax impact from USA wholesale challenges, assuming no significant in-season re-orders.
Cost inflation will make matters worse; Dr Martens has decided not to absorb these costs without increasing prices, leading to a further £35 million PBT headwind for the 2025 financial year
Dr Martens expects a single-digit percentage decline in revenue with a worst-case scenario of PBT being one-third of financial year 2024 levels.
On the bright side, the fourth quarter of 2024 saw a rise in Direct to Consumer (DTC) sales, especially in Japan, contributing to high single-digit year-on-year growth in this segment.
Alongside today’s trading update, boss Kenny Wilson announced his departure after six years as chief executive.
Current chief brand officer Ije Nwokorie will take over the top spot when Wilson leaves before the end of the current financial year.
Full results are due on 30 May.