Investing.com — Dr. Martens has reported a loss before tax of £29 million for the first half of 2025, slightly above analyst expectations of a £28 million loss, as the iconic footwear company grapples with declining revenues and a challenging wholesale market.
Adjusted for exceptional costs and currency losses, the company’s PBT loss narrowed to £18 million, flagging ongoing cost-saving measures and an emphasis on direct-to-consumer growth.
Revenues for the period fell 16% at constant exchange rates, slightly better than company guidance of a 20% decline and consensus estimates of 19%.
Sales were particularly weak in the Americas, down 20.2% CER, as wholesale demand remained subdued, reflecting cautious orders from retail partners.
Meanwhile, Asia-Pacific sales dropped 6.9% CER, and EMEA saw a 15.5% CER drop. Despite these challenges, e-commerce performance showed signs of improvement, particularly in Europe, where online sales grew 1.6% in Q2 after a 7.1% drop in Q1.
Dr. Martens reported an EBIT loss of £15.1 million for the first half of 2025, worse than consensus expectations of a £13.3 million loss.
On an adjusted basis—excluding exceptional costs and currency impacts—EBIT narrowed to a £4 million loss, reflecting the company’s focus on cost-saving measures.
Non-essential operating costs fell by £2.3 million year-on-year, though marketing expenses increased by £1.8 million to drive demand for new autumn/winter products.
Trading since October has shown positive momentum in the DTC segment across all regions, with the company crediting its product-focused marketing strategy and demand for new designs. This bolstered optimism for the second half, historically a stronger period for the brand due to holiday sales.
Analysts at Morgan Stanley (NYSE:MS) noted the better-than-expected sales performance and the company’s efforts to stabilize e-commerce growth as key drivers of investor confidence.
With early signs of recovery in the DTC segment and tightened cost controls, Dr. Martens remains focused on navigating its challenges and rebuilding momentum under its incoming leadership.
Dr. Martens reaffirmed its guidance for the full fiscal year, emphasizing its cost-saving efforts, which are expected to deliver £25 million in savings by FY26, at the upper end of its forecast range.
These savings are primarily driven by headcount reductions and improved procurement processes.
The company also announced a reduction in its planned capital expenditures, trimming new store openings to 15 for FY25 from an earlier target of 25-30.
The company has made strides in strengthening its balance sheet, cutting net debt by 27% year-on-year to £349 million and reducing inventory levels by 22% compared to the same period last year.
Separately, Dr. 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 remain available for consultation until March 2025 to ensure a smooth transition.
“Overall, we view these results as a step in the right direction, against depressed expectations. Peak trading remains ahead of DOCS, and we view the current guidance framework as achievable, and improving the financial stability of the business,” said analysts at RBC Capital Markets in a note.
Shares of the company surged over 13% at 4:00 ET (9:00 GMT).
