Dr Martens has today reported a 61% jump in annual earnings and forecast "strong profit" growth this fiscal year as the UK bootmaker's strategy of cutting discounts and improving margins appeared to be paying off.
Shares in Dr Martens, known for its lace-up chunky boots, rose more than 9% in early trade, after annual profit rebounded from a 65% decline in the previous year.
That marked progress in CEO Ije Nwokorie's strategy of pulling back on discounting prices and offering promotions across its consumer and wholesale channels.
The company has also cut inventory and debt as part of a turnaround and cost-cutting drive, after high costs and weak US wholesale demand dented sales and profits. The pressure worsened last year as US tariffs forced the company to absorb additional costs.
Annual adjusted pre-tax profit surged 61.3% to £55m for the year ended March 29, beating analysts' estimates of £51m, although revenue fell 2.9% to £764.9m.
Dr Martens' shares have gained more than 20% in the past 12 months on signs its results would improve.
The bootmaker - which also sells sandals, bags and accessories - said shoes were the standout performer in the year, with revenue rising 19% across models including the 1461 Shoe, Adrian Tassel Loafer and Mary Jane, now accounting for 31% of group revenue compared to 26% a year earlier.
"Beyond the current year, we see ongoing profit recovery and growth potential," Berenberg analysts said in a note.
Dr Martens also said full-price direct-to-consumer revenue in its largest market, the US, rose 14%, as the company reduced its reliance on discounted sales to wholesale partners.
