Dr. Martens plc reported sales in the third quarter ended December 31 rose 11 percent year-over-year and 21 percent compared to 2019.
Sales reached £307.0 million and were up +5 percent on a constant-currency basis.
Dr. Martens said, “Q3 is typically the strongest DTC period. We delivered DTC revenue growth of 33 percent (50 percent LY-1). Ecommerce grew strongly in addition to a very good recovery of retail, resulting in improved DTC mix, up 10pts to 64 percent. As planned, the prioritisation of inventory into DTC, due to the impact of Covid on both manufacturing and global shipping, led to the lower performance of wholesale. By region, EMEA recorded strong growth and Americas delivered a solid Q3 with a very good DTC performance, which was partially offset by wholesale. APAC revenues were impacted by renewed Covid restrictions across the region.”
Channel Performance
Dr. Martens said, “Our e-commerce revenue performance remained strong, with revenue growth of 16 percent against a tough comparative given the significant restrictions and closures within the store network in Q3 FY21, and up 85 percent LY-1. In the quarter, the e-commerce revenue mix improved by 2pts to 39 percent, which represents 30 percent revenue mix YTD.
“Q3 retail revenue accelerated on the prior quarters, up 72 percent year-on-year (up 16 percent LY-1) with strong in-store conversion and improved footfall. The emergence of the Omicron Covid variant curtailed the improving trends through December, with increased trading restrictions, although these were fewer than in Q3 FY21.
“In the period we opened 11 new own stores, including 2 stores in Italy (in Verona and Milan) and 4 stores in the USA. At the end of Q3, we had 158 own stores globally, having opened 24 YTD.
“As planned, wholesale revenues were down 14 percent year-on-year (down 10 percent LY-1) as we prioritised inventory to DTC due to manufacturing and shipping delays caused by Covid. The vast majority of Q4 pairs have now been manufactured and are in transit by sea to our distribution centres.”
Regional Performance
Dr. Martens said, “EMEA was strong, with revenue up 40 percent (45 percent constant currency). This was driven by solid e-commerce growth and recovery of retail, together with a good wholesale performance. We saw excellent revenue growth in Italy, following conversion to a directly operated model earlier this financial year, in line with the trend seen in Germany in its first year of conversion.
“In Americas, we achieved a very good DTC performance, which was partially offset by the expected impact on wholesale from global shipping delays. This resulted in the Americas revenue up 4 percent (6 percent constant-currency).
“APAC revenues were most impacted by Covid, with revenue declining by 28 percent (24 percent constant-currency). We saw particular weakness in our distributor markets, where third-party stores were impacted by renewed restrictions, most notably in Australia and China.”
Outlook
Dr. Martens said, “We had a very strong DTC peak trading period, with February and March now being our quieter trading months. We remain confident in achieving market expectations for our first full year as a listed business, subject to no significant Covid impact in Q4.”
Photo courtesy Dr. Martens
