Full Year 2025 Dr Martens PLC Earnings Call Transcript
Key Points
- Dr. Martens PLC (DOCMF) successfully delivered on all four key objectives set for FY25, including turning around America's DTC performance and achieving growth in H2.
- The company significantly strengthened its balance sheet, with inventory and net debt both reduced ahead of guidance.
- A cost action plan resulted in GBP25 million of annualized savings, with full benefits expected in FY26.
- The company exceeded its inventory reduction target, achieving a GBP67 million reduction, which was a key driver in reducing net debt by GBP95 million.
- APAC regions, particularly Japan, South Korea, and China, showed strong year-on-year growth in D2C sales, contributing positively to the company's performance.
- Total pairs sold were down 9%, leading to an 8% decline in revenue to GBP805 million on a constant currency basis.
- Gross margin rates slightly declined year-on-year, primarily due to a shift in product mix with lower-margin shoes and sandals increasing.
- EMEA D2C performance was disappointing, impacted by a highly promotional environment and weaker consumer confidence, particularly in the UK.
- The underlying EBIT dropped significantly from GBP126.4 million last year to GBP67.1 million on an adjusted basis.
- The company incurred GBP25.3 million in adjusting items, including GBP17.3 million in exceptional costs related to the cost action program and other strategic initiatives.
Hello and welcome to our FY25 results presentation. I'm joined today by Giles Wilson, our CFO. I'll do a short introduction before handing over to Giles to run through our FY25 financial results, and then I'll return with some closing comments.
FY25 was a year of stabilization. At the start of the year, we laid out four key objectives, and I'm pleased to say that we delivered against all of these. We turned around our America's DTC performance with America's DTC back to growth in H2. We pivoted our marketing to relentlessly focus on product with great initial results, you heard me talk about these back in November. We have reduced our operating cost base, taking GBP25 million of annualized savings out of the business. And really importantly, our balance sheet is significantly strengthened with inventory and net debt both down significantly ahead of guidance.
Over to Giles to talk you through the year's financial performance.
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