Dr Martens shares plunge as tough outlook sets challenge for new CEO
Reuters
Published Apr 16, 2024 07:13
Updated Apr 16, 2024 09:00
By Eva Mathews and Yadarisa Shabong
(Reuters) -Dr Martens shares plunged around 30% on Tuesday to a record low after the British boot maker warned of another tough year in its key U.S. market, setting a challenge for its next chief executive.
The company, whose chunky lace-up boots have been a fashion statement since the 1960s, named chief brand officer Ije Nwokorie as its next CEO.
Kenny Wilson, who has been at the helm for six years, has decided this year will be his last as CEO, Dr Martens (LON:DOCS) said, although it did not give a precise date for the handover.
The company has been struggling with customer destocking and reduced orders in the United States from wholesale customers wary of economic pressures.
Its shares have been hammered in recent years by a series of profit warnings and disappointing results that prompted investor Marathon Partners to call for an immediate strategic review earlier this month.
They hit a record low of 65.50 pence in early Tuesday trade. Dr Martens said its results for the year ended March 31, 2024, would be in line with market expectations, but flagged another difficult year ahead.
"The FY25 outlook is challenging, and the whole organisation is focused on our action plan to reignite boots demand, particularly in the USA, our largest market," Wilson said.
"The nature of USA wholesale is that when customers gain confidence in the market we will see a significant improvement in our business performance, but we are not assuming that this occurs in FY25."
The company said it was anticipating a double-digit percentage decline in U.S. wholesale revenues, which would dent overall profits.
It also said it did not expect to hike prices further this year, which had previously enabled it to offset cost inflation.
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Written By: Reuters
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