Bootmaker Dr Martens has been hit by the strength of the dollar this year.
Shares in Dr Martens have plunged by over 16% in early trading, after it became the latest retailer to warn that profitability is under pressure.
It blamed weaker-than-expected demand – with ‘direct to consumers’ sales growth slower than expected – and the strength of the US dollar this year, as well as continued investments.
With the key Christmas trading period ahead, the group now expects core earnings margins for the full year to be between 100 basis points and 250 basis points lower than last year. Revenues in the last six months rose 13%, but pre-tax profits fell 5%.
Russell Pointon, director at Edison Group, says: “In spite of the economic headwinds plaguing the retail sector, including rising inflation and the cost-of-living crisis, Dr Martens is maintaining its high teens revenue growth for the remainder of the year, however management now expects the EBITDA margin to be 1-2.5 margin points below the prior year given the strength of the US Dollar.”