Consumers in the U.S. are holding off on purchasing boots — and Dr. Martens is bearing the brunt. Dr. Martens stock was down by more than 34% Tuesday morning, all the way $0.78 per share, after the company warned of a challenging fiscal year 2025 outlook and a decline in its U.S. wholesale market.
Trading of the company’s shares on the London Stock Exchange was briefly suspended.
The footwear company said it anticipates its U.S. wholesale revenue to be down by double digits in 2025, in part because its order book for the autumn and winter season, which makes up about half of its sales in the area, is “significantly down.”
The company expects revenue in 2025 to decline by single-digit percentage year-over-year, led primarily by ongoing inflation challenges, which the company said it is “unable to offset” as it has in prior years. Moreover, Dr. Martens said it does not anticipate it will increase prices any further this year.
Given ongoing challenges in its U.S. wholesale market, the company also expects that it will need extra inventory storage facilities through fiscal year 2025 for its North America business. That’s an estimated cost of £15m (~$18.8 billion), it added.
Kenny Wilson, CEO of Dr. Martens said, the nature of its U.S.A wholesale business is that “when customers gain confidence in the market,” Dr. Martens “will see a significant improvement” in its business performance. However, the company is “not assuming that this occurs in FY25,” Wilson, who will step down as CEO by the end of the fiscal year, said.
Wilson will be succeeded by Ije Nwokorie, current chief brand officer and former Apple senior director.
Dr. Martens was founded in 1960 in Northamptonshire, England. The British brand is known for its tough, durable boots.