Investing.com — Dr. Martens (LON:) has reported a modest rise in sales for the third quarter, flagging progress in its efforts to turn around performance in key markets, particularly the United States.
The British bootmaker posted a 3% increase in group revenue at constant currency to £267 million, though reported revenue dropped by 3% to £260 million due to exchange rate fluctuations.
The company’s direct-to-consumer revenue grew by 1% CC, with ecommerce sales rising by 2% and retail revenue slipping by 1%.
Wholesale revenue showed a stronger recovery, increasing by 9% CC, benefiting from a weaker performance in the same period last year.
“After a difficult multi-year period, we believe DOCS may be nearing the bottom of its earnings cycle in 2024-2025. New CEO and CFO brings a new approach, which on the back of depressed sentiment and earnings expectations offers the prospects of a better outlook for the business,” said analysts at RBC Capital Markets in a note.
Growth in wholesale was driven by gains in Europe, the Middle East, and Africa (EMEA) and the Asia-Pacific region (APAC), while wholesale revenue in the Americas saw a single-digit decline, which the company said was expected.
By region, APAC stood out with a 17% increase in DTC revenue, fueled by ecommerce growth. Japan, one of the company’s largest markets, performed particularly well.
In contrast, DTC revenue in EMEA fell by 5%, which Dr. Martens attributed this to heightened promotional activity in December, when it chose to maintain its discounting strategy rather than engage in deeper price cuts.
In the Americas, DTC revenue rose by 4%, reflecting early signs of recovery in a market that has faced challenges in recent years.
“Our 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,” said newly appointed chief executive, Ije Nwokorie in a statement.
The company noted it is actively managing costs and expects to hit its inventory reduction target for the full year.
While some regions continue to face challenges, particularly in retail, the steady improvement in key areas such as ecommerce and the U.S. market provides confidence in the brand’s longer-term strategy.
Dr. Martens has maintained its guidance for the 2025 financial year, signaling that it is on track to meet its objectives despite a mixed performance across regions.
“The outlook for boots demand remains difficult to predict near term, even if we do acknowledge the brand value. Overall, we anticipate the technical boots segment is likely outperforming casual boots given changing consumer habits around outdoor pursuits and hiking particularly in the US,” RBC said.
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