Investing.com — Dr. Martens reported a pre-tax loss of £29 million for the first half of 2025, slightly better than analysts' expectations of a loss of £28 million, as the iconic manufacturer shoe company is struggling with declining revenues and a difficult wholesale market.
Adjusted for exceptional costs and foreign exchange losses, the company's PBT loss narrowed to £18 million, reflecting continued cost-cutting measures and a focus on business growth. direct sales to consumers.
Revenue for the period fell 16% at constant currencies, slightly ahead of the company's forecast of a 20% decline and consensus estimates of a decline. by 19%.
Sales were particularly weak in the Americas, with revenue down 20.2% as wholesale demand remained weak, reflecting cautious orders from retail partners.
At the same time, Asia Pacific sales fell 6.9% CER and EMEA sales fell 15.5% CER. Despite these challenges, e-commerce performance has shown signs of improvement, particularly in Europe, where online sales increased 1.6% in the second quarter after a 7.1% fall in the first quarter.
Martens reported an EBIT loss of £15.1 million for the first half of 2025, below consensus expectations of a loss of £13.3 million.
On an adjusted basis – excluding one-off costs and currency effects – EBIT narrowed to a loss of £4 million, reflecting the company's focus on cost-cutting measures.
Non-core operating costs decreased by £2.3 million year-on-year, although marketing spend increased by £1.8 million to drive demand for new autumn/winter products.
Since October, the DTC segment has seen positive momentum across all regions, with the company highlighting its product-driven marketing strategy and demand for new models. This increased optimism for the second half, a historically stronger period for the brand due to holiday sales.
The analysts of Morgan Stanley (NYSE:) noted that better-than-expected sales performance and the company's efforts to stabilize e-commerce growth were key drivers of investor sentiment.
With early signs of recovery in the DTC segment and tighter cost controls, Dr. Martens remains focused on overcoming challenges and regaining momentum under its new leadership.
Martens has reaffirmed its guidance for the full financial year, emphasizing its cost-cutting efforts, which are expected to deliver £25 million in savings by FY26 , which corresponds to the upper part of the expected range.
These savings are mainly due to reduced headcount and improved procurement processes.
The company also announced a reduction in planned capital expenditure, reducing new store openings to 15 for FY25, down from an earlier target of 25-30.
The company has made progress in strengthening its balance sheet, reducing net debt by 27% from the previous year to £349 million and reducing inventory levels by 22% from the same period. period of the previous year.
Martens confirmed that Ije Nwokorie will assume the role of CEO on January 6, 2025, succeeding Kenny Wilson, who will step down from the board but will remain available for consultation until March 2025 to ensure a smooth transition.
“Overall, we view these results as a step in the right direction, compared to disappointed expectations. Peak operations remain ahead of the DOCS, and we view the current guidance framework as achievable and “It improves the financial stability of the company,” analysts at RBC Capital Markets said in a note.
Shares of the company jumped more than 13% on Thursday.
