- Shares down 59% over the past year
- CEO Kenny Wilson to step down
- Challenging performance in the US
Shares in Dr. Martens (DOCS) fell 31% at one point to 66p in morning trading - a new 52-week low - as the iconic British footwear brand issued a profit warning.
The Camden Town-headquartered company said US wholesale revenue ‘is anticipated to be double-digit down year-on-year,’ adding ‘the decline in wholesale has a significant impact on profitability, with a base assumption being in the region of a £20 million pre-tax profit impact year-on-year.’
Dr. Martens’ CEO Kenny Wilson said: ‘There is a wide range of potential outcomes for full year 2025 given that we have only recently started the year. However, we have assumed that revenue declines by single-digit percentage year-on-year and at the pre-tax profit level we could see a worst-case scenario of pre-tax profit of around one-third of the full year 2024 level.’
EXIT OF CEO
Separately the company announced the departure of CEO Kenny Wilson who is leaving the business after six years in the role – and three years after the iconic British footwear brand made its US stock market debut.
Wilson will be succeeded by (chief brand officer) CBO Ije Nwokorie ‘before the end of the current financial year.’
EXPERT VIEW
Danni Hewson, head of financial analysis for AJ Bell said: ‘The market is putting the boot into Dr. Martens as it reports a bleak profit outlook and its chief executive Kenny Wilson steps down. Wilson had little choice after an extremely disappointing start to life as a public company since listing in 2021.
‘The company served up four profit warnings in 2023 with a difficult consumer backdrop not helping. However, it has also been the author of its own misfortune with a series of operational mishaps including inventory mismanagement.
‘In this context investors might have wanted to see an external candidate come in and shake things up. However, CBO Ije Nwokorie is stepping up to take the top job later this year.
‘Nwokorie is a recent recruit to the business, having served as a senior director at Apple Retail before joining late last year.
‘Dr. Martens remains an iconic brand and if the new boss is unable to fix the company’s problems it may be that an opportunistic predator comes along to take advantage.
‘Key for Nwokorie will be returning the US business to growth and reigniting demand in this market – he will need to bring all of his experience to bear to revive the brand and restore Dr. Martens’ fortunes.’
DISCLAIMER: Financial services company AJ Bell referenced in this article owns Shares magazine. The author of this article (Sabuhi Gard) and the editor (Martin Gamble) own shares in AJ Bell.
