REG - Dr. Martens PLC - Q3 FY24 Trading Statement

Dr MartensAnnouncement

25/01/2024 07:00

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RNS Number : 8274A  Dr. Martens PLC  25 January 2024

 

25 January 2024

Dr. Martens plc

Trading statement for the three months ended 31 December 2023

 

"Our Q3 performance is in line with the updated full year guidance provided in
November. Q3 DTC revenue declined by 3% (constant currency, "CC") and
wholesale was down 46% CC, resulting in Group revenue down 18% CC. This was
driven by a weak USA performance, as expected. Trading in the quarter was
volatile and we saw a softer December in line with trends across the industry.
Whilst the consumer environment remains challenging, we are taking action to
continue to grow our iconic brand and invest in our business. We remain
confident in our product pipeline for AW24 and beyond."

Kenny Wilson, Chief Executive Officer

 

Q3 results - at a glance

 

                                  Q3               YTD
                                  Reported  CC     Reported  CC
 Group revenue (£m)               267.1     273.8  662.9     681.9
 Change year-on-year              (21%)     (18%)  (12%)     (10%)

 By channel: change year-on-year
 Ecommerce                        (9%)      (8%)   (4%)      (2%)
 Retail                           -         3%     7%        10%
 DTC                              (5%)      (3%)   1%        3%
 Wholesale                        (49%)     (46%)  (27%)     (25%)

 DTC mix                          77%              61%
 %pts year-on-year                +12pts           +8pts

 

Channel Performance

Ecommerce revenue declined by 9% reported, or 8% CC. This was driven by
Americas, where ecommerce revenues were down double-digit, with EMEA recording
marginal growth and APAC slightly down year-on-year.

Retail revenue was flat on a reported basis and up 3% CC. We achieved a
double-digit growth in APAC driven by Japan, solid growth in EMEA and
declining revenue driven by continued weak footfall in USA, as anticipated.

During the quarter we opened 13 new stores across EMEA and APAC. At the end of
Q3 we had 235 own stores globally, having opened 38 stores YTD and closed
seven.

Wholesale revenue declined by 49% reported, or 46% CC; significant decline was
seen in both Americas and EMEA, in line with both our expectations and the
assumptions within our FY24 guidance. Wholesale customers continue to have
relatively low levels of in-market inventory, however the timing and level of
re-orders is unpredictable, meaning that our visibility over wholesale remains
weak.

Regional Performance

EMEA DTC revenue grew low single-digit in Q3, with a weaker October, impacted
by abnormally warm weather conditions, a strong November and a softer
December. We saw a good DTC performance in our continental European conversion
markets with a slightly softer result in the UK in line with industry trends.
EMEA wholesale declined significantly as planned, due to both the reduction of
sales to etailers, together with differences in the phasing of some orders.
Overall EMEA revenue declined by 15% year-on-year, on both a reported and CC
basis, driven by the wholesale performance.

Given the weak consumer backdrop, the performance of our Americas business was
challenging, as expected. We recorded a double-digit decline in DTC revenue,
with softer ecommerce and low footfall. Wholesale revenues broadly halved
year-on-year as continued caution from wholesale customers resulted in a weak
order book. Overall, Americas revenue was down 31% reported, or 26% CC. The
new Americas leadership team continue to take action, particularly in
marketing execution and ecommerce trading capabilities, to drive revenue and
grow the brand.

APAC recorded revenue down 8% reported, or 1% CC. Japan, our largest market in
the region, delivered good growth overall, with the relative DTC and wholesale
performance driven by the transfer of 14 franchise stores at the end of FY23.

 

Outlook

The guidance provided at the time of our H1 results, for full year CC revenue
decline of high single-digit percentage year-on-year, remains unchanged. All
other guidance for FY24 also remains unchanged. The appreciation of sterling
since the end of H1 means that, if current FX rates persist, we anticipate a
currency headwind to the P&L of approximately £5m, together with a
non-cash Balance Sheet translation charge, also of approximately £5m.

 

QUARTERLY REVENUE PERFORMANCE

 

 Year on Year Change (unaudited)     Q1                      Q2                      Q3                      FY24 YTD
                                     Reported  CC     Reported      CC        Reported      CC        Reported      CC
 Total revenue                       (11%)     (11%)  (2%)          1%        (21%)         (18%)     (12%)         (10%)

 Revenue:          Ecommerce         7%        7%     -             4%        (9%)          (8%)      (4%)          (2%)
                   Retail            27%       27%    6%            10%       -             3%        7%            10%
                   DTC               17%       17%    3%            7%        (5%)          (3%)      1%            3%
                   Wholesale(1)      (41%)     (41%)  (5%)          (2%)      (49%)         (46%)     (27%)         (25%)

 Region:           EMEA              (1%)      (3%)   14%           13%       (15%)         (15%)     (2%)          (3%)
                   Americas          (26%)     (27%)  (12%)         (6%)      (31%)         (26%)     (24%)         (20%)
                   APAC              12%       16%    (22%)         (14%)     (8%)          (1%)      (9%)          (2%)

 

1.         Wholesale revenue including distributor customers.

 

 

Enquiries

Investors and analysts
 

Bethany Barnes, Director of Investor Relations
 
 
Bethany.Barnes@drmartens.com

 
+44 7825 187465

Beth Callum, Senior Investor Relations
Analyst
 
Beth.Callum@drmartens.com

 
 

Press
 

H/Advisors
Maitland
                                +44 20 7379
5151

Clinton
Manning
                                +44 7711 972662

Katharine
Spence
                                +44 7384 535739

 

Gill Hammond, Director of
Communications
                                +44 7384 214248

 

Investor and Analyst conference call

Kenny Wilson, CEO and Jon Mortimore, CFO will host a conference call and
Q&A for investors and analysts at 09:00 GMT on 25 January 2024. This can
be accessed via https://www.drmartensplc.com (https://www.drmartensplc.com) .

 

 

About Dr. Martens

Dr. Martens is an iconic British brand founded in 1960 in Northamptonshire.
Produced originally for workers looking for tough, durable boots, the brand
was quickly adopted by diverse youth subcultures and associated musical
movements. Dr. Martens has since transcended its working-class roots while
still celebrating its proud heritage and, six decades later, "Docs" or "DM's"
are worn by people around the world who use them as a symbol of empowerment
and their own individual attitude. The Company listed on the main market of
the London Stock Exchange on 29 January 2021 (DOCS.L) and is a constituent of
the FTSE 250 index.

 

 

Cautionary statement relating to forward-looking statements

Announcements, presentations to investors, or other documents or reports filed
with or furnished to the London Stock Exchange (LSE) and any other written
information released, or oral statements made, to the public in the future by
or on behalf of Dr. Martens plc and it group companies ("the Group"), may
contain forward-looking statements.

Forward-looking statements give the Group's current expectations or forecasts
of future events. An investor can identify these statements by the fact that
they do not relate strictly to historical or current facts. They use words
such as 'aim', 'ambition', 'anticipate', 'estimate', 'expect', 'intend',
'will', 'project', 'plan', 'believe', 'target' and other words and terms of
similar meaning in connection with any discussion of future operating or
financial performance. In particular, these include statements relating to
future actions, future performance or results of current and anticipated
products, expenses, the outcome of contingencies such as legal proceedings,
dividend payments and financial results. Other than in accordance with its
legal or regulatory obligations (including under the Market Abuse Regulation,
the UK Listing Rules and the Disclosure and Transparency Rules of the
Financial Conduct Authority), the Group undertakes no obligation to update any
forward-looking statements, whether as a result of new information, future
events or otherwise. The reader should, however, consult any additional
disclosures that the Group may make in any documents which it publishes and/or
files with the LSE. All readers, wherever located, should take note of these
disclosures. Accordingly, no assurance can be given that any particular
expectation will be met and investors are cautioned not to place undue
reliance on the forward-looking statements.

Forward-looking statements are subject to assumptions, inherent risks and
uncertainties, many of which relate to factors that are beyond the Group's
control or precise estimate. The Group cautions investors that a number of
important factors, including those referred to in this document, could cause
actual results to differ materially from those expressed or implied in any
forward-looking statement. Any forward-looking statements made by or on behalf
of the Group speak only as of the date they are made and are based upon the
knowledge and information available to the Directors on the date of this
report.

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