Dr Martens performance improves, but still plenty for new CEO to do(2025)

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Dr Martens performance improves, but still plenty for new CEO to do
Dr Martens issued a trading update on Monday that was significant as much for the fact that it was Ije Nwokorie’s first as CEO as much as for what was actually in it

Nwokorie took over from Kenny Wilson as of 6 January after Wilson had been at the helm during a period of declining sales and profits, a botched move to its new LA distribution centre, a plunging share price and unhappy shareholders suggesting it put itself up for sale

The former Apple retail exec had originally moved to the company as chief brand officer but is now in the top job

So what was in the update? As well as telling us he’s excited to be CEO, he said the “global relevance of our iconic brand, the strength of our product line and the passionate commitment of our team give me great confidence for FY25 and beyond

While the numbers for the 13 weeks to 29 December weren’t exactly spectacular, they were better overall than in recent periods. That said, its share price still dipped marginally in early Monday trading

Nwokorie said “Q3 trading was as expected and our outlook for FY25 remains unchanged. We have made good progress against our objective of turning around our USA performance, with USA DTC in positive growth in Q3. We continue to actively manage our costs and are on track to meet our inventory reduction target for FY25. The team and I are squarely focused on returning the business to sustainable and profitable growth

In numbers that meant group revenue up 3% at £267 million— although that was at constant currency (CC). On an actual basis, it was down 3% at £260 million. On a CC basis, Q3 DTC revenue was up 1% and by region, Americas DTC revenue was up 4%, EMEA DTC down 5% and APAC DTC up 17%. Group wholesale revenue was up 9% CC but only 3% reported

By channel, the DTC performance was the result of e-commerce revenue growing by 2% CC and retail revenue declining by 1% CC. Wholesale revenue grew by 9% CC, against a weak comparative. The wholesale performance by region was in line with its expectations, with EMEA and APAC up year-on-year and Americas wholesale down in single-digits CC as anticipated

Looking at the Q3 figures regionally, one of its key objectives this year is to return Americas DTC revenue to positive growth in the second half. The company said it’s on track, with that 4% rise, a pleasing result given the aforementioned Americas wholesale decline

But the EMEA DTC fall was “impacted by the deep promotional nature of several markets, especially in December, when we maintained our discipline and only participated in promotional activity in line with our discounting strategy

And the APAC 17% leap came as it saw a strong performance across the region, with its largest market Japan continuing to deliver good growth

Now, as mentioned, most of those figures weren't spectacular and clearly there are still areas in which the company is underperforming. But the latest quarter included one less trading day than a year ago. And comparing the numbers to the combined Q1 and Q2 results delivered back in November, Monday's figures paint a much prettier picture. Back then, Dr Martens had said H1 revenue fell 18% at actual exchange rates and 16% CC to £324.6 million

So the company is clearly seeing some improvement based on the turnaround work led by its previous CEO Kenny Wilson. It will be interesting to see the changes its new chief executive puts in place and whether he can accelerate its recovery process

FASHIONNETWORK.COM