Shares in newly-listed footwear brand Dr Martens (DOCS) got something of a kicking from investors after the firm posted profits for the year to March which undershot analysts’ forecasts due to bonus payments.


While revenues of £773 million were marginally above the consensus, earnings before and after tax were significantly short of expectations after the firm booked £80.5 million of exceptional costs for the initial public offering.

Shares dropped as much as 15% to 420p in early trading before recovering to 450p by 10am.

The firm said the exceptional costs included £49.1 million for staff bonuses and national insurance contributions, which will have come as a surprise to anyone who didn’t read all the way to the end of the prospectus.

Tucked away on page 185 of the document, the firm said it would make a bonus payment to each employee, with between £17.6 million and £19.8 million to be distributed to staff who were not senior managers, but no figure was given for the balance to be distributed to the managers.


In terms of progress towards its strategic goals, the firm upped its game in online selling, netting a 73% increase in sales with e-commerce representing 30% of revenues.

However, its strong reliance on physical stores in countries like Japan meant retail sales were down 40% to just 13% of total revenues.

As a result, direct to consumer sales were down slightly at 43% of total revenues whereas the firm is targeting a 60% share within the next couple of years, meaning it has its work cut out.

Guidance for this financial year is unchanged from the IPO, namely high teens revenue growth as the firm laps last year’s Covid impact, while growth from 2023 onward is seen in the mid-teens range driven by an increase in e-commerce to 40% of revenues.

Aside from the bonus news, ‘there may be some disappointment that despite a robust sales performance the outlook given by Dr Martens has remained unchanged’, said AJ Bell investment director Russ Mould.

‘Newly-listed firms often set the bar low on guidance so they can clear it early in their life as a public company’, added Mould.

Meanwhile, the firm continues to face grumbles of complaint from devotees of the brand over the quality of its products since manufacturing was moved to Asia nearly two decades ago.


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Issue Date: 17 Jun 2021