Dr Martens, a renowned boot manufacturer, anticipates a significant financial setback due to US tariffs. The company, known for its iconic footwear, has shifted most of its production to Vietnam, which faces higher import duties amid the trade dispute initiated by US President Donald Trump.
Having redirected its supply chain from China to mitigate US import tariffs, Dr Martens foresees a “high single digit” million-pound impact on annual profits due to the tariffs. Despite this challenge, the company maintains its full-year profit forecast range of £53 million to £60 million, excluding the tariff implications.
Following this announcement, Dr Martens’ share price experienced a sharp decline of over 10% during early trading on a recent Thursday. The company, famous for its classic yellow-stitched boots, plans to offset the additional tariff costs starting from the next fiscal year.
In response to the tariff situation, Dr Martens outlined strategies to counter the impact of increased tariffs for the future, emphasizing cost control, flexible sourcing, and pricing adjustments in the US market. The company’s latest financial update revealed reduced losses to £11 million in the first half of the fiscal year, with sales increasing by 0.8% to £327.3 million.
Ije Nwokorie, the CEO of Dr Martens, expressed confidence in the brand’s resilience, citing positive volume growth and successful product launches. Despite the prevailing market uncertainties and consumer caution, the company remains optimistic about its strategies for the upcoming year.
Investment director Russ Mould of broker AJ Bell remarked on Dr Martens’ gradual progress towards profitability, highlighting improvements in sales performance and reduced losses, particularly in the Americas region. However, the market response to the company’s half-year results indicated investor disappointment, reflected in the declining share price during early trading.