Dr Martens strong Q1 sales outperform pre-COVID-19 results

Dr Martens has today announced a strong Q1 performance in the three months to 30 June 2021, which has seen group revenue at £147.3m – up 52% year on year – but more impressively up 31% compared to the same period in pre-pandemic 2019.

By channel, Dr Martens saw an encouraging recovery of retail, good growth in ecommerce against a very strong comparative, and a strong wholesale performance as order patterns normalised.

Throughout Q1, all US stores were open, UK stores opened from mid-April, and Continental Europe stores opened steadily through May and June. All three regions saw good growth, although the Americas was a standout, recording triple-digit revenue growth.

As a result, the company, which earlier this year launched its IPO on the London Stock Exchange, remains confident for FY22, though cautious as Q1 is typically the smallest period, being the end of the spring/summer season. It also says, like many others across the industry, that it is “experiencing inbound shipping delays and other operational challenges due to COVID-19.”

Dr Martens CEO, Kenny Wilson, said: “I am very pleased with the performance across our business in the first quarter of our new financial year. We achieved continued growth in ecommerce against a triple-digit growth rate last year and the reopening of our own-stores drove a strong retail recovery through the period.

“In addition, we saw a return to more normalised wholesale shipments over the period. The first quarter of the year is always our smallest period, being the end of the spring/summer season. Our larger autumn/winter season begins from Q2 and our performance to date gives us confidence for the remainder of the year. We will continue to take a long-term custodian mindset, investing into our business and making decisions to drive the brand for the decades to come.”

Japan remains the most impacted market for Dr Martens, with stores operating with varying capacity restrictions and a few locations remaining closed. That compares with Q1 last year, where the vast majority of Dr Martens stores globally were closed or subject to significant Covid-19 restrictions, which materially impacted retail revenues.

That significantly altered picture has resulted in this year’s Q1 retail revenue more than tripling year-on-year. The performance of Dr Martens stores improved as the quarter progressed, particularly those in the US and provincial UK.

On a two-year basis (Q1 2021 compared to Q1 2019) performance was as expected, with overall retail revenue down 6% for the quarter across all markets as a whole and positive in the month of June.

In Q1 this year, Dr Martens achieved strong ecommerce revenue growth of 11%. That was against a very high comparative with ecommerce growth in Q1 2020, which was up triple-digit, given the widespread store closures at that time.

On a two-year basis, ecommerce revenue is up 155%, and Dr Martens “saw a very strong performance” in its wholesale business in Q1, as customers normalised shipment timings back towards Q1. As a result, wholesale revenue is up 50% year-on-year, with particularly strong shipments in Americas, though that performance is against a weak comparative, as last year a large proportion of wholesale customers rescheduled orders into Q2 given the significant uncertainty at that time.

On a two-year basis, Q1 2021 compared to Q1 2019, wholesale revenue is up 23%. Given the rescheduling of orders in FY21, Dr Martens says it faces a stronger comparative in Q2 and therefore expects wholesale sales growth to moderate.