Dr Martens PLC (LSE:DOCS) shares stomped 6.5% higher to 68.5p as the bookmaker returned to profit growth last year, thanks to reduced discounting as part of a turnaround centred on higher-quality sales.
The FTSE 250-listed group reported an adjusted pre-tax profit of £55 million in the year to 29 March, up 61% on the year before, while revenue fell 2.9% to £764.9 million.
Gross margin increased to 66.2% from 65.0% as the company cut clearance activity across both its own stores and wholesale operations.
Shoes were the "current growth engine", with sales up 19%, while boots are "showing signs of stabilisation" as sales fell 8%, and bags remained "a long-term growth opportunity, with good early results" as sales grew 15%.
Group net debt excluding leases fell to £69.7 million from £94.1 million. The dividend was maintained at 2.55p.
The company has spent the past two years stabilising the business after weaker demand and excess inventory hurt profits, particularly in the US.
Management, led by chief executive Ije Nwokorie, is now shifting from a “channel-led” model to a “consumer-first” strategy, with greater focus on full-price sales, selective retail investment and wholesale partnerships.
Nwokorie, a former senior director in Apple's retail arm, said the group was now moving into the “scale phase” of the strategy in the new 2027 financial year, with a focus on retail store estate rather than opening new sites.
“There is still work to do in pivoting the business,” he said, adding that demand for the brand continued to strengthen, with growing interest from collaborators and wholesale partners.
The company said it expected “further strong” profit growth this year despite geopolitical uncertainty and weaker consumer confidence in some markets.
Analyst John Stevenson at Peel Hunt said PBT was ahead of his £52.3 million forecast, but also includes a restatement of the US tariff amount of circa £4 million, which leaves underlying PBT "broadly in line with our forecasts if we strip this out".
He noted "good progress" around the group, with US direct-to-consumer sales up 14%, wholesale back in growth and a "strong order book" for autumn/winter.
"There is a wide range to consensus, at £61-71 million FY27 PBT, with numbers likely to move towards the lower end, in our view, reflecting the challenging trading in EMEA."
** UPDATE: Adds share price and broker comments **