Dr Martens shares sink 26% as profits halve and outlook darkens

Shares in Dr Martens (LSE: DOCS) plunged 26% this morning after the iconic boot brand warned over profits, sales and its recovery prospects in the key US market.

In its half-year to September 30, pre-tax profits halved to £25.8m as revenue declined 5.4% to £395.8m, hurt by a “difficult consumer environment” in America. Dr Martens maintained its dividend at 1.56p.

CEO Kenny Wilson said “We saw a mixed trading performance” but remain confident in long-term growth, although full-year revenue is now expected to fall high single-digits.

Dr Martens also warned that 2023 profits will miss expectations, hurt by higher finance costs. A bounce back in the US will also “take longer to materialise than initially anticipated,” given the “challenging backdrop.”

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Wilson said, “Notwithstanding the clear challenges we face in the USA market we remain very confident in our iconic brand.”

But the profit warning and gloomier outlook on America, a key growth market, triggered a 26% share price plunge. Dr Martens stock has now sunk 56% in 2023 and is 58% lower than a year ago.