British shoe retailer Dr. Martens plc has delivered solid sales growth for the first half of the 2022/23 financial year. However, the result fell short of the previous year’s level. Because the company warned of falling margins in its interim report published on Thursday, the share price immediately fell by more than twenty percent.
In the period from April to September, consolidated profit was 418.6 million pounds sterling (487.4 million euros) and thus 13 percent (currency-adjusted +7 percent) above the corresponding level of the previous year. Growth was slowed down by the discontinuation of sales in Russia and the separation from some sales partners in South America. Adjusted for the effects of these measures, revenues increased by 18 percent.
Earnings before interest, taxes, depreciation and amortization (EBITDA) stagnated at 88.8 million British pounds because higher investments in opening new stores, marketing initiatives and additional staff weighed on the margin. Net profit fell eight percent to 44.7 million British pounds (52.0 million euros).
The prospects for the further course of the year caused concern among investors. The company acknowledged that its own-retail business had already been weaker than expected in the first half of the year and has “fluctuated from week to week” since then. In addition, the management made the decision to “hold on to the planned investments in the future instead of reducing them with a view to short-term profit”. It is therefore to be expected that the EBITDA margin will be lower than in the past financial year, according to a statement. However, the company stuck to its sales forecast: Percentage growth “in the high teens” is therefore still expected.