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Dr Martens sees profit slip and hikes dividend by 28%

Dividend increase: Dr. Martens increased its dividend by 28%, from 1.22 pa to 1.56 pa.

Dr Martens shares fall sharply as UK shoemaker’s profits tumble – but shareholders benefit from 28% dividend hike

  • Dr Martens saw profits plummet and revenue growth slow in its half-year results
  • Shares of a company listed on the FTSE 250 fall sharply and the dividend is increased by 28%

Dr Martens saw profits plummet and revenue growth slow in the six months to September 30 amid a deteriorating economic environment.

The FTSE 250-listed group’s pre-tax profit fell 5% to £44.7m, while revenue rose 13% to £418.6m, or 7% excluding the fluctuation profit monetary.

The latest revenue data compares to growth of 18% over the past full year, or 22% at constant exchange rates.

Dividend increase: Dr. Martens increased its dividend by 28%, from 1.22 pa to 1.56 pa.

Dividend increase: Dr. Martens increased its dividend by 28%, from 1.22 pa to 1.56 pa.

Dr Martens’ share price fell sharply today and fell 17.36% or 49.73p to 236.67p in early morning trading, having fallen more than 38% last year.

But, in a boost for shareholders, Dr Martens increased his dividend by 28%, from 1.22 pa to 1.56 pa.

The retailer’s underlying profit remained stable at £88.8 million at the end of the period.

Dr Martens said the decline in profits over the period reflected a ‘proactive decision’ to invest in new stores, marketing, people, technology and inventory ‘rather than focusing on profits to come. short term”.

Retail revenue increased 38% to £91m, mainly due to the continued traffic-driven recovery in the UK, mainland Europe and the US, as consumers were increasingly returning to stores, the group said.

Regarding boot sales, the company added: “We have seen continued success with our platform soles, including our Quad range.

“Platform boots that worked well with Quad soles included the Audrick, Jetta in APAC and Jarrick in EMEA. Within our casual range, we launched the new Boury utility boot in September ahead of AW22.

Direct-to-consumer growth in the second quarter was slower than expected, the group said, pointing to the weaker “consumption environment” during the period.

In the nearly two months of the second half of the year, direct communications with consumers were “variable from week to week”, the group added.

Dr Martens said his festive sales were, to date, ahead of forecasts and figures by the same point a year ago.

Looking ahead, the company said, “We are maintaining the teen growth revenue forecast for the full year, based on real currency.”

Kenny Wilson, group boss, added: “While there are economic challenges ahead, we are well positioned for future growth.

“We will continue to drive growth investments to implement the DOCS strategy, primarily in new stores, marketing, human resources, technology and inventory.

“Reflecting our confidence in the future, our balanced global revenues and our strong balance sheet, the Board of Directors has decided to increase the interim dividend by 28% to 1.56p per share.”

Russell Pointon, Edison Group Director, said: “Despite economic headwinds plaguing the retail industry, including rising inflation and the cost of living crisis, Dr Martens maintains his strong teen revenue growth for the remainder of the year, however management now expects the EBITDA margin to be 1 to 2.5 margin points lower than the prior year given the strength of the US dollar.

“Investors will also be reassured by the board’s proposal for a 28% increase in the interim dividend. The brand successfully resolved supply chain issues, with all factories open during the period and the opening of a new manufacturing base in Cambodia.

“Looking forward, Dr. Martens will look to capitalize on the impending holiday season while continuing to invest in new stores, marketing and technology.”

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