Dr. Martens experiences decline in shares as fiscal targets are reduced, impacting revenue and pretax profit. Slow recovery in U.S. market leads to decrease in investor confidence.
Dr. Martens, the renowned British footwear and clothing brand, has seen a decline in its shares following the revision of its fiscal 2024 targets. The company has experienced a slower-than-expected recovery in the U.S. market, leading to a decrease in confidence among investors.
As of 09:06 GMT, Dr. Martens shares were down by 30.65 pence, marking a significant 27% decline and resting at 84.15 pence.
Anticipating a reduction in revenue for the year, Dr. Martens predicts a high single-digit percentage decrease compared to the reported £1.0 billion ($1.27 billion) in fiscal 2023. Consequently, this is expected to impact earnings before interest, taxes, depreciation, and amortization (EBITDA). The company foresees EBITDA to fall moderately below the firm's projected market range of GBP223.7 million to GBP240 million.
Furthermore, the revision in targets also indicates that pretax profit is projected to suffer a £5 million setback. Dr. Martens' provided market estimate for fiscal 2024 places pretax profit between GBP128.7 million and GBP148.0 million.
These revisions come in light of a weaker performance during the first half of the financial year and mixed trading in the second half.
While the company has withdrawn its previous guidance of high single-digit revenue growth for fiscal 2025, it remains steadfast in its medium-term targets.
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