Dr Martens PLC’s (LSE:DOCS) stock market rating is currently uncertain, according to analysts at Barclays.
The boot maker’s direct-to-consumer (D2C) sales channel visibility, particularly in the United States, is seen as crucial for determining its financial outlook.
A recent trading update from Dr. Martens did little to clarify the company’s prospects for the remainder of the year. Barclays analyst Richard Taylor highlighted that while some retail market indicators are moderately encouraging, the demand in the U.S. is a critical factor.
“We believe there are a wide range of potential outcomes for financial performance, and believe that observing D2C trends, especially any signs of improvement in the US, will be critical to judge whether a recovery can be achieved, or whether forecasts are still too optimistic,” Taylor noted in a report.
In late May, Dr. Martens warned investors about its sales, which it described as “very second-half weighted.” Taylor’s analysis on the day of the company’s results for the 2024 financial year, released on 30 May, described the numbers as “expectedly poor.” He also pointed out the ongoing weak consumer demand in the United States as a significant factor.
“Given the revenue decline, the company note that FY25 will be ‘very second-half weighted, particularly from a profit perspective’, and we assume a loss before tax in H1 of £26 million, before a rebound to PBT of £47 million in H2 FY25, vs £50 million in H2 FY24,” Taylor stated.
