Dr. Martens (DOCS) H2 2025 earnings summary

Executive summary

• Achieved stabilization in FY25, delivering on four key objectives: Americas DTC growth in H2, product-led marketing pivot, cost reduction, and significant balance sheet strengthening.

• Returned Americas DTC to growth in H2, reduced operating costs, and improved inventory and net debt positions ahead of guidance.

• Embedded strong cost discipline and reset the business's approach to cost management.

• Business stabilized in FY25, with momentum building in H2 as revenues improved over H1.

Financial highlights

• Revenue down 10% YoY to £787.6m (constant currency: £805m); total pairs sold down 9%.

• Gross margin 65.0%, down 0.6pts YoY, mainly due to product mix shift and clearance of aged stock.

• Adjusted EBIT £60.7m (margin 7.7%), adjusted PBT £34.1m, both significantly lower YoY but slightly ahead of consensus.

• EPS on a constant currency basis at GBP 1.10; adjusted EPS 2.4p, both down YoY; dividend per share maintained at 2.55p.

• Inventory reduced by £67.2m, exceeding the £40m target; net bank debt reduced by £83.4m to £94.1m, total debt including leases down to £249.5m; net debt/EBITDA at 1.9x.

Outlook and guidance

• Expectation of sustainable, profitable revenue growth above the footwear market rate in the medium term.

• Targeting mid to high teens EBIT margin, supported by operating leverage and strong cash generation.

• FY26 guidance: 20–25 new store openings, D&A £75–80m, net finance costs £25–27m, blended tax rate ~26%, capex £20–25m, inventory broadly flat, net debt around £200m including leases, expected currency impact: ~£18m to revenue and ~£3m to PBT.