Dr Martens marches on with strong sales but listing dents profits
Heritage footwear business Dr Martens has enjoyed soaring sales despite the global pandemic leaving many of its customers stuck indoors.
Sales in the 12 months to 31 March jumped 15% to £773 million, with strong growth in its online business.
But pre-tax profits took a heavy hit – down 30% to £70.9m – due to costs of £80.5m associated with the brand’s stock market listing in January.
The majority of the initial public offering (IPO) costs were due to a £49.1m bonus paid out to staff.
Dr Martens did not give figures for each country in which it trades, but said sales in Europe rose 17%, with the same levels of growth in North and South America.
In the Asia-Pacific region sales grew just 7% due to slower growth in Japan, the company’s largest market in the area, due to it having a higher number of stores there. These were closed due to the pandemic for large parts of the year. Another major market in the region – China – saw revenues up 46%.
The majority of Dr Martens’ global growth came from online sales, where revenues from its website were up 73% – meaning its e-commerce business now accounts for 30% of all sales. By comparison, sales in physical stores were down 40% to £99.7m.
The company’s wholesale business saw growth of 18% to £437.9m as it focused on having fewer relationships but with “quality partners”.
This saw strong growth from online-only retailers which sell Dr Martens products and “robust trading” in the US.
In the UK, the company shut down three stores, leaving 34 in total, but said trading was strong enough to be able to pay back £1.3m claimed under the Government’s furlough scheme.
Looking ahead the company said that the guidance set out at the time of the IPO is unchanged. In FY22 it anticipates high teens revenue growth year on year. From FY23 and over the medium-term its anticipates mid-teens revenue growth.
The company said it was targeting a 60% DTC mix over the medium-term, with e-commerce growing to at least 40% of group sales.