Dr. Martens has reported a pre-tax loss of £29 million for the first half of 2025, slightly higher than analyst expectations of £28 million. The iconic footwear company is facing challenges with declining revenues and a tough wholesale market.
After adjusting for exceptional costs and currency losses, the company’s pre-tax loss narrowed to £18 million, indicating ongoing cost-saving efforts and a focus on direct-to-consumer growth.
Revenues for the period declined by 16% at constant exchange rates, performing better than the company’s guidance of a 20% drop and consensus estimates of 19%.
Sales were particularly weak in the Americas, down 20.2% at constant exchange rates, due to subdued wholesale demand. Asia-Pacific sales fell by 6.9% and EMEA saw a 15.5% decline. Despite these challenges, e-commerce sales showed improvement, especially in Europe, where online sales grew by 1.6% in Q2 after a 7.1% decline in Q1.
The company reported an EBIT loss of £15.1 million for the first half of 2025, worse than the expected £13.3 million loss. On an adjusted basis, excluding exceptional costs and currency impacts, EBIT narrowed to a £4 million loss, reflecting the company’s focus on cost-saving measures.
Non-essential operating costs decreased by £2.3 million year-on-year, while marketing expenses increased by £1.8 million to drive demand for new autumn/winter products.
Recent trading has shown positive momentum in the direct-to-consumer segment across all regions, with the company attributing this to its product-focused marketing strategy and demand for new designs. This has raised optimism for the second half of the year, historically a stronger period for the brand due to holiday sales.
Analysts at Morgan Stanley noted the better-than-expected sales performance and the company’s efforts to stabilize e-commerce growth as key factors driving investor confidence.
Despite the challenges, Dr. Martens remains focused on overcoming obstacles and rebuilding momentum under new leadership. The company reaffirmed its guidance for the full fiscal year, highlighting its cost-saving initiatives expected to deliver £25 million in savings by FY26.
The savings are primarily driven by headcount reductions and improved procurement processes. Dr. Martens also announced a reduction in planned capital expenditures, scaling back new store openings to 15 for FY25 from an earlier target of 25-30.
The company has made progress in strengthening its balance sheet, reducing net debt by 27% year-on-year to £349 million and lowering inventory levels by 22% compared to the same period last year.
Additionally, Dr. Martens confirmed that Ije Nwokorie will take on the role of CEO on January 6, 2025, succeeding Kenny Wilson who will step down from the board but remain available for consultation until March 2025.
Analysts at RBC Capital Markets view these results positively, considering them a step in the right direction. The company’s peak trading remains ahead, and the current guidance framework is seen as achievable, improving the financial stability of the business.
Shares of the company surged over 13% at 4:00 ET (9:00 GMT).