By Raechel Thankam Job
Jan 27 (Reuters) – British bootmaker Dr Martens posted a decline in quarterly sales and forecast broadly flat annual revenue growth on Tuesday as shoppers across Europe and Asia-Pacific baulked at a return to full prices, knocking its shares nearly 13% down.
The sales decline underscores the challenge facing CEO Ije Nwokorie as he tries to cut back on promotions and discounts while navigating weak demand and higher U.S. import costs.
The balancing act has forced the company known for its lace-up chunky boots to sacrifice near-term sales to protect margins.
Revenue fell 3.1% to 251 million pounds ($343 million) with direct-to-consumer sales dropping 7% for the third quarter ended December 28.
“The outlook for boots demand remains difficult to predict near term, even if we acknowledge the brand value,” said RBC Capital Markets analysts.
The company’s shares fell as much as 12.5% and were headed for their worst day since September 2024.
US SALES OUTSHINE OTHER REGIONS
Its Americas region delivered 2% revenue growth on a constant currency basis in the quarter, as U.S. shoppers proved more receptive to its full-price strategy than their European and Asia-Pacific counterparts.
Nwokorie told analysts on a call that “we have no reason to worry” about price increases in the U.S., noting though that it was early days and he did not expect negative consumer reaction to the U.S. hikes, the company’s first in three years.
While cost-conscious consumers have been tightening their purse strings, retailers saw a surge in spending in the U.S. holiday season from more affluent shoppers.
Newer and more expensive boots were doing well in the U.S., Nwokorie said.
In contrast, customers in Germany and the UK, which account for over half the company’s EMEA sales, shied away from non-discounted products, the company said.
Dr Martens, which is also expanding to more markets in Latin America like Colombia and Uruguay, maintained its forecast for significant profit growth for the year ending March.
($1 = 0.7309 pounds)
(Reporting by Raechel Thankam Job in Bengaluru; Editing by Sherry Jacob-Phillips and Emelia Sithole-Matarise)
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