Dr Martens, a UK-based footwear brand, has announced a return to profit growth. The company has tightened its discounting and boosted its margins by focusing on selling products at full price. This strategy has resulted in enhanced gross margins and a 61% increase in adjusted pre-tax profits.
Dr Martens has reported a return to profit growth, as it tightened discounting and boosted margins with its turnaround gathering pace. The bootmaker reported adjusted pre-tax profits of £55million for the year to 29 March, up 61 per cent on the previous year.
Gross margins rose to 66.2 per cent, from 65 per cent, as the company focused on selling products at full price. It marks progress in chief executive Ije Nwokorie's strategy to pull back on discounting and offer promotions across both its consumer and wholesale businesses. Shares in Dr Martens were up 5.75 per cent, or 3.70p, to 68.00p on Tuesday morning, having risen nearly 19 per cent in the past year.
Dr Martens also cut inventory and debt as part of its cost-cutting drive, after taking a hit from higher costs and weak US demand. Shoes were the 'current growth engine' for the business, with sales up 19 per cent. Bags were a 'long-term growth opportunity' as sales rose 15 per cent. Across all product categories, items priced over £220 were the fastest-growing price category
Dr Martens Tightened Discounting Boosted Margins Consumer Business Model Aus Alternative Business Models Products At Full Price Items Priced Over £220 Shoes Were The 'Current Growth Engine' Boots Falling 8% Sandals Down 11%
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