Dr Martens has reported a sales dip as it repositioned itself after a bruising few years.
The FTSE 250 footwear retailer said group revenue fell 2.7 per cent to £253million in its third quarter, the 13 weeks to 28 December, as it pulled back from discounting products.
That leaves the full-year outlook broadly flat, as it focuses on the ‘quality of our revenue and profitability’ rather than chasing volume.
Chief executive Ije Nwokorie said it is ‘a year of pivot, as we make the necessary changes to our business to set us up for future sustainable growth.’
Nwokorie took over the British footwear brand at the start of last year and said it must wean itself off an over-reliance on discounts.
He added: ‘We have continued to improve the quality of our revenue through a disciplined approach to promotions and this represents a headwind to overall revenue, particularly in ecommerce.’
The iconic footwear brand reported direct-to-consumer sales slipped in the run up to Christmas
Dr Martens shares tumbled 9.25 per cent, down 7p to to 68.65p on Tuesday and are down 3.9 per cent over the past year but have nosedived 85 per cent over five years.
Wholesale revenue increased by 9.5 per cent over the third quarter, but direct-to-consumer fell 6.5 per cent.
Dr Martens said it had taken a ‘disciplined approach to promotions’ in the EMEA region, while reducing online discounts across Asia.
Performance in the Americas was particularly strong, with the retailer reporting 2 per cent growth driven by retail sales, while ecommerce was flat.
It said it had ‘reduced clearance activity and returned to a normal promotional calendar’ as it cuts its reliance on discounting.
Last year, Dr Martens reported that profits plummeted by more than 90 per cent to £8.8million, from £93.3million the previous year.
It was hit by declining turnover across all major territories as well as higher staffing costs, prompting a new strategy to increase customers and enter new markets.
Adam Vetesse, market analyst at eToro said: ‘This is a battered brand with mid-teens margin potential, trading cheap after prior stumbles, but demanding patience for the consumer-first pivot to deliver.
‘Shares ran out of steam around the 100p mark towards the back end of last year and could face a range bound path near term, with upside hinging on margin beats and tariff navigation.’
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