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(Sharecast News) - Shares in Dr Martens surged on Thursday on signs of "encouraging" trading since the start of the autumn/winter season despite the troubled footwear maker swinging to a loss for the half year as its woes in the US continued.
Outgoing chief executive Kenny Wilson said the company expected to make £25m of cost savings, at the top end of its guidance range. Around two thirds of this figure were job cuts with the majority of people made redundant leaving the business at the end of the first half.
"Our new marketing campaigns are showing encouraging early signs, with strong sales of new product, giving us confidence that we will return USA direct-to-consumer to positive growth in the second half," Wilson said.
Pre-tax losses came in at £28.7m for the six months to September, compared with a £25.8m profit a year earlier. Revenue fell 18% to £324.6m.
Shares in the iconic brand surged by as much as 14% in London but the stock has lost 85% since it floated on the London stock exchange in 2021.
Dr Martens, famed for its chunky-soled lace up boots, introduced a new line of footwear in an attempt to bolster flagging sales in the US, its second biggest market. Sales in the Americas fell 22.3% to £115m driven by weaker footfall at its 60 stores in the region.
The company also introduced foreign exchange impact guidance for the first time and said it expected the remainder of the financial year to be impacted by currency headwinds of around £18m to revenue and £6m to profits. It also confirmed that Wilson would hand over the CEO role to brand chief Ije Nwokorie on January 6.
''Dr Martens has pulled itself up by its bootstraps and there are tentative signs its turnaround is lacing together. The iconic footwear company has found it hard going stomping new fashion ground overseas, with the US, its biggest market, proving particularly tough," said Susannah Streeter, head of money and markets at Hargreaves Lansdown.
"The increased investment in marketing across the United States, is showing signs of paying off with new styles winning fans in the key Autumn/Winter season. The update of its flagship 1460 boot with soft leather has proved popular, but faux fur additions to other products and new ranges like the Anistone biker boots are also selling well."
"Shares rose by more than 14% in early trade, but given how far the company's valuation has fallen since its listing back in 2021 - this only marks a mini-march of optimism."
Reporting by Frank Prenesti for Sharecast.com
