# Dr Martens tripped up by tough U.S. market Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2023-06-01 Category: NEWS Category URL: https://financedigest.com/category/news Meta Title: Dr Martens struggles in challenging U.S. market Meta Description: Shares drop over 10% as profit margins hit by consumer backdrop. CEO predicts ongoing challenges & decrease in core profit margins this year. URL: https://financedigest.com/dr-martens-tripped-up-by-tough-u-s-markethtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2023-06-01t090537z2lynxmpej5015mrtroptp4dr-martens-results-1736813946109-compressed.jpg) # Dr Martens tripped up by tough U.S. market By Eva Mathews and Helen Reid (Reuters) -Dr Martens shares dropped more than 10% on Thursday after the British bootmaker warned investments would hit profit margins this financial year and the consumer backdrop in the United States “was the toughest in the world at the moment”. The U.S. is the company’s second-largest market and weakness there contributed to a drop in core earnings of more than a quarter in the [year ended](https://www.financedigest.com/russian-stocks-to-pare-some-heavy-losses-by-year-end-reuters-poll.html "Russian stocks to pare some heavy losses by year-end – Reuters poll") March 31. Dr Martens, whose pricey work boots have been fashionable since the 1960s, has been [struggling with waning demand](https://www.financedigest.com/oil-struggles-to-hold-gains-amid-mixed-demand-view.html "Oil struggles to hold gains amid mixed demand view") in the U.S. as [consumers cut back on discretionary spending](https://www.financedigest.com/the-impact-of-consumer-spending-on-the-market-2.html "The Impact of Consumer Spending on the Market") amid high inflation. It has also faced logistical problems at a recently [opened distribution centre](https://www.financedigest.com/ukraine-grain-export-coordination-centre-opens-in-istanbul.html "Ukraine grain export coordination centre opens in Istanbul") in Los Angeles that drove up costs. We think that the consumer backdrop in the United States is the toughest in the world at the [moment,” CEO](https://www.financedigest.com/ceo-blume-hails-historic-moment-as-porsche-ag-lists-on-frankfurt-exchange.html "CEO Blume hails ‘historic moment’ as Porsche AG lists on Frankfurt exchange") Kenny Wilson said in an interview, adding that looked set to continue. I think their consumer has been under [pressure for a longer period](https://www.financedigest.com/pressure-relief-valve-market-is-expected-to-register-highest-cagr-of-3-5-during-the-forecast-period-2021-to-2031persistence-market-research.html "Pressure Relief Valve Market Is Expected To Register Highest CAGR Of 3.5% During The Forecast Period 2021 to 2031:Persistence Market Research") of time … but this is also a sort of shared misery with everyone else,” Wilson added. The company sees core profit (EBITDA) margins falling 1-2 percentage [points this fiscal year as it plans to invest 50-55 million](https://www.financedigest.com/chain-of-points-announces-start-of-points-token-crowdsale-with-21-million-points-available.html "Chain of Points Announces Start of POINTS Token Crowdsale with 21 Million POINTS Available") pounds over the coming years, including in new stores. [Profit before tax fell 26% to 159.4 million pounds](https://www.financedigest.com/uks-nationwide-to-pay-340-million-pounds-to-customers-after-profit-leap.html "UK’s Nationwide to pay 340 million pounds to customers after profit leap") ($198 million) in the year ended March 31. A series of [profit warnings](https://www.financedigest.com/wh-smith-warns-on-2022-profit-due-to-slow-travel-recovery.html "WH Smith warns on 2022 profit due to slow travel recovery") … has knocked investors’ confidence in the iconic British bootmaker – and its [full year](https://www.financedigest.com/abb-dispels-industrial-gloom-to-raise-full-year-outlook.html "ABB dispels industrial gloom to raise full-year outlook") results are unlikely to inspire any immediate change in their perceptions,” said eToro analyst Mark Crouch. One bright spot was that annual revenue crossed 1 [billion pounds](https://www.financedigest.com/edf-delays-uk-nuclear-project-to-2027-ups-price-by-3-billion-pounds.html "EDF delays UK nuclear project to 2027, ups price by 3 billion pounds") for the first time, helped by demand in Europe and Japan. Direct-to-consumer [sales also made up more than half of the total](https://www.financedigest.com/duct-tapes-market-to-grow-at-5-2-natural-rubber-based-adhesives-to-contribute-over-4-5th-of-total-sales-fmi.html "Duct Tapes Market to Grow at 5.2%; Natural Rubber-Based Adhesives to Contribute Over 4/5th of Total Sales: FMI"), in another first. Dr Martens said [price increases would help offset](https://www.financedigest.com/oil-prices-rise-as-weaker-dollar-offsets-china-covid-19-concerns.html "Oil prices rise as weaker dollar offsets China COVID-19 concerns") some of the cost pressures. It raised [prices 6% last fiscal year](https://www.financedigest.com/with-uk-food-price-inflation-at-46-year-high-lawmakers-launch-probe.html "With UK food price inflation at 46-year high, lawmakers launch probe"). Its shares were down 10% to 140.98 pence at 0850 GMT. ($1 = 0.7923 pounds) (Reporting by Eva Mathews in Bengaluru and Helen Reid ; Editing by Sherry Jacob-Phillips and Mark Potter) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---