// Dr Martens profits tumble despite hitting £1bn sales milestone
// The footwear retailer’s pre-tax profits dropped 26% to £159.4m in the year to 31 March 2023
Dr Martens sales hit £1bn for the first time, however, profits plummeted due to “operational mistakes” in the US market.
Pre-tax profits for the footwear retailer plunged 26% to £159.4m in the year to 31 March 2023, dragged down by a £3.9m impairment charge and a £10.7m currency exchange charge.
The retailer said it had made several “operational mistakes” caused by US distribution issues and marketing campaigns that were “not focused enough on boots”, which it said held back group boot sales.
As a result, Dr Martens warned its profit margins will fall 1-2 percentage points this year as it invests in its infrastructure to resolve the problems.
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Direct-to-consumer sales surged 16% to £520.7m last year, led by a store sales rocketing 30% to £241.7m and online purchases up 6% to £279m.
Chief executive Kenny Wilson hailed the group’s £1bn sales achievement and said: “Reaching this milestone is testament to the strength of our brand, our long-standing DOCS strategy and the hard work and dedication of our fantastic people globally.
“Direct to consumer is now more than half our revenue and the Dr. Martens brand remains strong with all key metrics either ahead of, or in line with, last year.”
Dr Martens opened 52 new stores, including 12 franchise transfers in Japan, offset by six closures, ending the year with 204 own stores.
Wilson said the retailer’s performance in EMEA and Japan was “very good” and that there was “encouraging momentum going into the new financial year”.
“In America, against the backdrop of a challenging consumer environment, we made operational mistakes…we have undertaken detailed reviews to understand why these issues occurred and have begun to embed the lessons learned into the business.
“We are fixing the issues in America, including a significant strengthening of the team there, and returning America to good growth is our number one operational priority.”
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