Retailer Cites US Store Expenses and Lower Wholesale Revenue as Factors

  • Dr Martens downgrades FY23 guidance due to higher costs
  • EBITDA expected to be around £245m
  • Total revenue for Q4 grew by 6% in EMEA and APAC
  • Softer direct-to-consumer growth in America
  • Cash of £158m and inventory of £258m as of 31 March
  • Maintains FY24 revenue growth guidance of mid to high single digits on a constant currency basis
  • Incremental costs associated with US sales to be around £15m due to rent annualisation
  • Temporary warehouses for the full year offset by lower container and handling costs

Dr Martens has downgraded its full-year guidance for fiscal year 2023, with expected EBITDA now at around £245 million due to higher costs in the United States and lower wholesale revenue. The company’s total revenue for Q4 increased by 6% driven by growth in Europe, Middle East, Africa (EMEA) and Asia-Pacific (APAC), but direct-to-consumer sales in America were softer. As of March 31, Dr Martens had cash of £158 million and inventory of approximately £258 million. The retailer maintains its fiscal year 2024 revenue growth guidance at mid to high single digits on a constant currency basis, similar to FY23. Incremental costs related to sales in the US are expected to be around £15 million due to rent annualisation. Dr Martens plans to maintain temporary warehouses for the full year, partially offset by lower year-on-year container and handling costs, which will be weighted towards the first half of FY24. CEO Kenny Wilson said, ‘We continue to adopt a custodian mindset, taking decisions in the best long-term interests of all our stakeholders, and I believe firmly in the Docs strategy, the continued strength of the Dr Martens brand, and the medium to long-term growth potential of the business. I look forward to sharing more details at the full year results.’

Factuality Level: 10
Factuality Justification: The article provides accurate and objective information about Dr Martens’ financial performance and guidance for FY23 and FY24, with no signs of sensationalism or personal perspective presented as fact.
Noise Level: 3
Noise Justification: The article provides relevant information about Dr Martens’ financial performance and guidance adjustments, with a focus on specific factors affecting their EBITDA and inventory. It also includes comments from the CEO regarding the company’s strategy and outlook. However, it lacks in-depth analysis or exploration of broader trends or consequences for stakeholders.
Financial Relevance: Yes
Financial Markets Impacted: Dr Martens’ stock price and retail sector
Financial Rating Justification: The article discusses Dr Martens downgrading its FY23 guidance, impacting its financial performance and future expectations, which can affect the company’s stock price and the retail sector as a whole.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: No extreme event mentioned in the text.

Reported publicly: www.retailsector.co.uk