// Dr Martens has cut its revenue and earnings estimates amid bottleneck issues at its new LA distribution centre
// The company said it now expected revenue growth of 11%-13%
Dr Martens has warned on annual profit and revenue after the business faced “significant operational issues” at its new distribution centre in Los Angeles and weaker-than-anticipated US trading.
The footwear retailer blamed “people and process” errors, which caused a bottleneck of stock at the plant and has responded by opening three temporary facilities near its LA distribution centre.
It expects the bottleneck to reduce wholesale revenue by £15-25m and underlying earnings by £16-25m, including £8-11m of supply chain costs.
“We now expect full-year revenue growth of 11-13% on an actual currency basis and full-year EBITDA to be between £250m and £260m,” said chief executive Kenny Wilson.
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The retailer said it anticipates knock-on effects from the FY23 disruption in FY24 but expects these to normalise in the first half of FY24.
Dr Martens said total revenue for the third quarter to end December grew 9%, or 3% on a constant currency basis, but was below its expectations.
It said DTC had a “very strong December” with growth of 20%, led by retail and supported by good double-digit growth from ecommerce.
Wilson said: “Demand for Dr Martens remained resilient through challenging conditions during our peak trading period of Q3.”
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