Dr Martens shares surge on turnaround hopes, outlook

(Sharecast News) - Shares in UK footwear company Dr Martens surged by more than 20% on Thursday as the firm said it expected 2026 earnings to be in line with guidance and would cut discounts in the Americas and EMEA regions under a turnaround plan led by new boss Ije Nwokorie. It added that prices would remain unchanged despite the impact of US tariffs as all of its spring/summer stock was in the market, and by the start of July most autumn/winter ranges would have arrived or be in transit.

More than 60% of Dr Martens shoes come from Vietnam, which faces a 46% "reciprocal" tariff from July under US President Donald Trump's attack on global trade partners.

"We generate strong product gross margins, which is helpful given that tariffs are charged on cost, not retail price," the company, which has issued a raft of profit warnings over the past year, said.

"We do however recognise that there is continued macroeconomic uncertainty and the full outcome of tariffs is still unknown, and we will monitor this closely through the year and take action as appropriate."

Adjusted pre-tax profit fell to £34.1m from £97.2m, beating analysts' consensus of £30.6m, according to a company-compiled poll. The company is guiding for earnings of £54m to £74m for fiscal 2026.

"We will reduce discounting in Americas and EMEA, across both our own ecommerce channel and through wholesale, with the aim of driving full price sales. We have a positive autumn/winter wholesale order book in EMEA and the USA order book is currently broadly in line with last year, before the benefit of any in-season re-orders," the iconic bootmaker said.

Pre-tax profit for the year to March fell to £8.8m from £93m as revenue dived 10% to £787.6m against a challenging macroeconomic and consumer backdrop in several of the company's core markets.

Nwokorie said direct to consumer sales in its key US market had bounced back to growth in the second half of the year, while net debt fell £110.3m to £249.5m, ahead of guidance of £310m to £330m.

However, it added that UK revenues have remained lower since the year-end "due to a challenging market", while unfavourable foreign exchange rates would see it take a hit to group sales and profits of around £18 m and £3m respectively in 2025-26.

It also expected inventory to be broadly flat year-on-year and plans to open 20 to 25 new stores.

Reporting by Frank Prenesti for Sharecast.com