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Investing.com -- Dr Martens (LON:DOCS) said it expects to return to profit growth this financial year (FY25), supported by a strategic pivot under new CEO Ije Nwokorie that puts greater focus on shoes, sandals, and bags alongside its signature boots.
The bootmaker also reported better-than-expected profit before tax (PBT), sending its shares soaring nearly 18% in London trading on Thursday.
Dr Martens posted adjusted pre-tax profit of £34.1 million ($46 million) for the previous year, beating consensus expectations of £30.6 million.
The company projects that adjusted pre-tax profit for the 2026 fiscal year (FY26) would fall within analysts’ range of £54 million to £74 million.
Dr Martens also intends to scale back discounting in its key markets, including the U.S.
"As we look forward into FY26, we will reduce discounting in Americas and EMEA, across both our own ecommerce channel and through wholesale, with the aim of driving full price sales," the company said in the release.
"We have a positive Autumn/Winter wholesale order book in EMEA and the USA order book is currently broadly in line with last year, before the benefit of any in-season re-orders."
Analysts at RBC Capital Markets said FY26 consensus estimates "are likely to come down largely reflecting FX headwinds not properly reflected."
Dr Martens reported full-year revenue of £788 million for FY25, down 10% on a reported basis and 8% at constant exchange rates. The figure was slightly below expectations of £799 million. Revenue in the Americas declined 11%.
Gross margin came in at 65.0%, also slightly below expectations.
Fourth-quarter revenue declined 5% year-on-year reported, or 7% on constant currency. This marks a modest slowdown on a two-year basis and reflects reduced discounting and some timing effects in wholesale shipments.
Inventory levels fell to £187 million, better than expected, now representing 24% of sales compared to 29% in the previous year. Management said both company-owned and marketplace inventory levels are healthy ahead of the peak trading period.
Sales of shoes, sandals, and mules grew both online and in stores during fiscal 2025, while boot sales declined.