Pandemic-Fueled Online Sales Boost Dr. Martens Annual Results

Meredith Derby Berg
·3 min read

Dr. Martens released its first annual earnings results as a public company on Thursday, showing revenues that increased 15%, propelled by strong increases from its e-commerce platform and from sales in the Americas, Europe, the Middle East and Africa, as well as China.

But IPO-related costs pulled down the company’s net earnings by 52% for the period ending March 31. Dr. Martens debuted on the London Stock Exchange in late January and raised $1.8 billion, or 1.3 billion pounds. The IPO costs for the year included bonuses, fees and other charges totaling about 81 million pounds.

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“We proved to be incredibly resilient through COVID-19. Initially, we focused on cash but then we invested in our brand and we focused on our people and keeping our consumers safe,” said Kenny Wilson, CEO of Dr. Martens, on an earnings call.

Wilson said the company largely focused on boosting its e-commerce division through marketing efforts, and, as a result, saw “exceptionally strong sales.” In turn, its 135 retail stores also supported e-commerce.

Over the year, Dr. Martens sold 12.7 million pairs of shoes, up from 11.1 million a year ago. The company, which opened 18 new retail stores during the period, said prices at retail increased 2.5% but that it does not plan to increase prices this year.

CFO Jon Mortimore said on the call that gross margins stood at 60.9%, up 1.2 points, thanks to supply chain efficiencies. The company said it has a multi-country sourcing model and close supplier relationships allowing it “to quickly react to a rapidly changing environment, ensuring minimal disruption and maintaining good availability throughout.”

Dr. Martens reported annual profit after taxes of 35.7 million pounds ($49.7 million) versus 74.8 million pounds a year ago.

Total revenues hit 773 million pounds, or $1.08 billion, versus 672.2 million pounds in the prior year.

E-commerce sales popped 73% to 235.4 million pounds, or $327.5 million, and, conversely, retail sales fell 40%.

Having a digital first mindset is positively affecting growth, Wilson said. In Europe, the company highlighted that it opened its first store in Rome, and now the city is the top e-commerce spot in Europe, surpassing Milan. Wilson added that in Texas, the company debuted two stores in key cities Houston and Dallas, which has positively impacted e-commerce sales in those locations as well.

Annual sales in the Americas rose 17% to 295.8 million pounds, or $411.5 million.

“America was probably least impacted by COVID-related restrictions,” said Mortimore on the call, particularly in the middle of America. He said Dr. Martens opened six new stores in the Americas in the year as well as a new distribution center in New Jersey. He added the company recently opened another distribution center in Los Angeles.

Elsewhere, sales in China rose 46%, led by e-commerce. In the EMEA region, Germany was particularly strong — it is the company’s second largest market in Europe now — with revenues up 56%.

Looking ahead, the company expects to open 20 to 25 new stores in fiscal year 2022, and for revenues to increase in the high teens on a percentage basis.

The brand also updated its future sustainability goals and plans to become carbon neutral by 2030 and by 2040, it plans to have all footwear made from sustainable materials.

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