Dr. Martens Plc (LON:DOCS) has today announced that, with agreement of the Board, Jon Mortimore has decided to retire from his role as Chief Financial Officer (CFO) of the Company. Jon will continue in his role until a successor is in place to ensure a smooth transfer of responsibilities.
The Company is commencing an external search for Jon’s successor.
Jon joined the company in April 2016. During his seven years at Dr. Martens, Jon has been instrumental in delivering the Company’s transition from a family-run company to a listed PLC, overseeing revenue growth from £230m to £1bn, as well as playing an integral role in the Company’s initial public offering (IPO) in January 2021.
Paul Mason, Dr. Martens Chair said “On behalf of the Board, I would like to thank Jon for his central role in driving the strong growth and strategic development of Dr. Martens over the last seven years. His knowledge of the business and understanding of the Company’s value drivers have played a key part in helping develop the business during this period. We also want to thank him for his careful stewardship of the finance function, in particular during the pandemic period, which is testament to his dedication and exceptional hard work. We wish him well in his retirement.”
Jon Mortimore, Dr. Martens plc CFO added “I am proud of the progress that Dr. Martens has achieved during my time as CFO since 2016 and I look forward to seeing further growth and success in the years to come. This is a great company with an incredible brand and passionate people, and I believe it has a very exciting long-term future ahead of it. I will be retiring once my successor is in place but until then, I will continue to support Dr. Martens in my role as CFO.”
Performance summary
Q4 revenue was up 6% (flat in constant currency (CC)) driven by strong direct-to-consumer (DTC) growth in EMEA and APAC, offset in part by continued soft DTC in America. Wholesale revenue was down in Q4 due mainly to the LA distribution centre (DC) operational issues and our planned shipment reduction to our China distributor, offset in part by growth in EMEA.
· Q4 total revenue grew 6% (flat CC) driven by strong overall DTC trading, which grew 20% (13% CC), with wholesale down 4% (-11% CC). Within DTC, retail grew 36% (28% CC) and ecommerce grew 8% (2% CC).
· For the full year, revenue growth was 10% (4% CC). DTC was up 16% (11% CC) and wholesale was up 4% (-3% CC). Within DTC, retail was up 30% (25% CC) and ecommerce was up 6% (1% CC).
· We now expect FY23 EBITDA to be around £245m due to higher costs at our LA DC and lower wholesale revenue.
· At 31 March, the company had cash of c.£158m and inventory of c.£258m.
LA DC update
We have made good progress on resolving the operational issues at our LA DC, which began impacting our America wholesale channel from December.
· Our most experienced supply chain team were sent to LA to take control of operations and implement the recovery plan, and they remain heavily involved.
· We opened three temporary warehouses to release excess shipping containers and store stock away from the LA DC.
· A third shift was added to focus on the additional work required to unblock the bottleneck and transfer excess stock to the temporary warehouses.
· As a result, shipment volumes at the LA DC are now back to normal levels.
· Work commenced on enlarging and reconfiguring the New Jersey DC to allow it to store, pick and pack for both DTC and wholesale channels in America and, in line with our plans, a successful, initial test shipment took place in March.
· In FY23, total incremental costs associated with the LA DC were c.£15m, higher than the £8-11m expected initially, due mainly to higher than anticipated container costs.
FY24
We are maintaining FY24 revenue growth guidance of mid to high single digits on a constant currency basis.
As with FY23, we expect FY24 incremental costs associated with the LA DC will be c.£15m, due mainly to rent annualisation as we now plan to maintain temporary warehouses for the full year, offset partly by lower year-on-year container and handling costs. These costs will be H1 weighted.
