Unseasonably warm weather and warehouse problems in the US put the boot into Dr Martens
Dr Martens shares crashed to a record low as the bootmaker warned revenues and profits would be lower than expected.
Business was hit by unseasonably warm weather in the US and ‘significant operational issues’ at its Los Angeles warehouse.
Dr Martens expects revenues to grow by 11-13pc for the year to the end of March, below City expectations of 16 per cent.
Dr Martens expects revenues to grow by 11-13% for the year to the end of March, below City expectations. Shares tumbled 30.7%
Profits are also set to be below forecasts of £286million, at between £250million and £260million, it said, adding that issues at the LA warehouse would cost it up to £25million in lost earnings.
Shares tumbled 30.7 per cent, or 64.3p to 144.9p, leaving it valued at just under £1.5billion – a dramatic fall from grace after it joined the stock market in London in early 2021 at 370p a share, giving it a value of £3.7billion.
Dr Martens said a ‘bottleneck’ was created the LA warehouse as goods arrived far quicker than expected.
It opened three temporary warehouses to deal with the stock and plans an extra shift at the LA warehouse by the end of the month.
The cautious outlook came after revenues rose 12 per cent to £754.5million in the first nine months of the year.
Chief executive Kenny Wilson said demand remained ‘resilient through challenging conditions’.
AJ Bell analyst Russ Mould said investors may be wondering if ‘people are thinking twice about paying a three- figure sum for a pair of boots when times are hard’.
Dr Martens said it was reviewing ‘strategic and economic benefits’ of sales to e-commerce players such as Asos, to drive more sales through its own website and stores.
The profit warning spelled bad news for investors such as private equity titan Permira, which has a 36 per cent stake.
But it was good news for Manhattan hedge fund Woodson Capital, which recently disclosed a short position against the business.
