Dr Martens has warned on profits after a slow start to the autumn-winter season, adding that ongoing problems with its US business “will take longer” to fix than it had first anticipated.
For the six months to September 30, the footwear retailer’s pre-tax profit plunged 55% to £25.8m, while EBITDA fell 13% as sales dropped 5% to £395.8m.
The business said: “Trading in the second half to date has been mixed, with the start of the Autumn/Winter season impacted by warm weather across all three regions and weaker traffic overall”.
Despite sales picking up up in Europe, the Middle East and Asia Pacific, the US market remains challenging for the retailer. It now expects full-year sales to decline by a “high single digit percentage and for EBITDA to be “moderately below the bottom end of the range of consensus expectations”.
Dr Martens chief executive Kenny Wilson said: “We are undoubtedly facing some more challenging headwinds in the US, but we are continuing to invest in the business, we continue to have faith in our iconic brand, and we continue to believe in the long-term growth potential of the business.”
Subscribe to Retail Gazette for free
Sign up here to get the latest news straight into your inbox each morning
In the US, its second-largest market by revenue, Dr Martens said the consumer environment has “become more challenging in recent months”, especially in wholesale.
It said widespread macro-economic caution amongst wholesale customers had resulted in a weaker order book than in prior years.
“Wholesale customers have low in-market inventory levels of our products, and therefore, we can expect them to re-order, however the timing and level of these re-orders are unpredictable, reducing visibility in our wholesale business.”
Although Dr Martens has seen “encouraging signs in very recent DTC trading, including over the Black Friday weekend”.
Click here to sign up to Retail Gazette‘s free daily email newsletter
