(BFM Bourse) – Famous for its unbeatable 1460 model, the British shoemaker plunged 25% on the London Stock Exchange after revising its 2022-2023 financial targets downwards following disappointing results.
British footwear brand Dr. Martens, whose performance in recent months has been weighed down by the global economic crisis, plunged 25% in London after disappointing results and lowered forecasts.
The company is facing “significant operational issues creating a bottleneck in (its) new distribution center” in Los Angeles and direct sales in the United States “weaker than expected, in part due to exceptionally warm weather for the season,” points out Kenny Wilson, the general manager.
A deterioration of the economic climate
As a result, the brand announced on Thursday worse-than-expected sales for its staggered third quarter, which ended at the end of December, at 335.9 million pounds, and lowered its sales forecast for its full fiscal year (it should grow from 11 to 13%). The action plunged 25.57% to 155.70 pence on Thursday on the London Stock Exchange.
Dr. Martens, a brand founded in 1960 and inseparable from the punk movement, had published fivefold annual results for its last financial year, but it is caught up in the deterioration of the economic climate, with the United Kingdom in particular projected into recession next year and faced with inflation of more than 10%.
The brand of famous orthopedic shoes with thick rubber soles had seen its net profit decline over a year for its first half, and warned in November that “consumer confidence has weakened”, which had already plunged it to the London Stock Exchange.
Online sales to speed up the pace
“Dr Martens has been caught up in operational issues at its new distribution center in Los Angeles” and “this is another big headache for the company, which was already facing disappointing sales” in the United States , “considered a key market for the company’s growth,” said Hargreaves Lansdown analyst Susannah Streeter.
The group is now focusing on direct sales to consumers, especially online, in order to be less dependent on resellers, who still represent the majority of results, and hoped to see its sales boosted by Christmas. But if “sales improved in America in December” this was not enough to “compensate for the weaker performance in October and November”, the company further indicated.
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