Dr. Martens reported revenue of £764.9m, down 2.9% on the year, as management deliberately reduced clearance sales and off-price wholesale activity, especially in America, to improve the quality of revenue. In retail, selling fewer discounted pairs can hurt sales today but protect the brand tomorrow.
The trade-off worked on the profit line. Adjusted profit before tax rose 61% to £55.0m, helped by tighter costs and better margins. Gross margin reached 66.2%, up from 65.0%. Dr. Martens sold slightly less, but kept more profit from each sale.
The recovery is not evenly spread. The Americas returned to modest growth at constant currency, while EMEA remained weaker, particularly in the UK and German-speaking markets. Direct-to-consumer sales fell, but wholesale grew as order books improved.
From punk icon to public-market pupil
The company's appeal still rests on a remarkable piece of brand history. The first 1460 boot was made in Northamptonshire in 1960. What began as sturdy footwear for workers became part of the uniform of musicians, rebels and youth subcultures. Few shoe brands have travelled so far from factory floor to fashion statement.
That heritage, however, has not spared shareholders. Dr. Martens listed in London in 2021 at 370p a share, valuing the company at about £3.7bn. Today the share price is around the mid-60p range.
The product mix is changing. Boots still dominate, accounting for 52% of revenue, but boot sales fell. Shoes were the bright spot, with revenue up 19% and their share of sales rising to 31%. That matters because Dr. Martens needs more purchase occasions beyond the classic boot. Sandals remain a weakness, while bags and accessories are still small but growing.
Cheaper, but not risk-free
The shares now look far less expensive than they did at flotation. At a share price in the mid-60p range, Dr. Martens is valued at roughly 0.8 times annual sales. Its price/earnings ratio is around 18 times.
The balance sheet is also healthier. Net debt including leases fell to £213.5m, from £249.5m, and inventory dropped to £160.8m, from £187.4m. Excess stock had been one of the company's past problems. The dividend was held at 2.55p a share, giving the stock an income angle, though the payout leaves little room for disappointment if profits stall.
Management expects further profit growth in FY27, helped by pricing, cost discipline and wholesale orders. Yet the backdrop remains uncertain: consumers are cautious, Europe needs work and the store strategy may create short-term pressure. Dr. Martens has taken useful steps away from discount dependence. The harder task is to prove that enough customers will keep paying full price for the bounce in its soles.
