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Dr Martens supply woes to be focus in results

Published 31/05/2023, 14:49
© Reuters Dr Martens supply woes to be focus in results
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Proactive Investors - Dr. Martens PLC (LON:DOCS) will have much to prove in June 1’s full-year results release on Thursday, with investors likely to keep a close eye on the condition of the shoemaker’s supply chain.

FTSE 250-listed Dr Martens has bumped down profit forecasts twice since reporting half-year results in November, largely due to supply issues and unseasonal weather last Autumn.

Earnings before interest, taxes, depreciation, and amortization of £245m were forecast by Dr Martens in April, down from a December estimate of between £250mln and £260mln.

April’s forecast would mark a near 7% fall on last year’s earnings, which the company explained would be due to “decisive action” to fix issues at its Los Angeles distribution centre.

Despite claims from Dr Martens that problems were now solved, “investors will want to see more signs that these issues have finally been ironed out,” Hargreaves Lansdown (LON:HRGV) analyst Susannah Street said.

“The bottlenecks in the supply chain have disrupted operations in the US, which is its largest market,” she explained.

A 65% fall in Dr Martens’ stock since floating in January 2021, and 20% slip this year alone, has blatantly marked that company’s struggles.

“There were already concerns about the long-term growth for the brand, given the fashion world’s fickle tastes, and these operational difficulties have booted in fresh problems for the company,” Streeter added.

Read more on Proactive Investors UK

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