Traders put the shoe into shares of Dr Martens after the famously beloved shoemaker warned that increased investment, weak demand and a strong dollar would hurt full-year earnings.
The work of the DOCS group listed in London,
which joined the market in January 2021 at 370p per share, fell 24% to 218p.
The maker of cherry red mid-calf boots, popular since the 1970s, said pre-tax profit fell nearly 6% to 58 million pounds ($70 million) in the six months before the end of September.
The decline was primarily due to higher depreciation costs after investment in new stores and IT systems.
Sales in North America increased by 31%, with 6.3 million shoes and boots sold during the period. However, the company warned that rising costs would squeeze profit margins amid signs that consumers are more cautious about the cost-of-living crisis.
Dr. Martens expects its annual EBITDA and amortization margin to be 100 to 250 basis points lower than a year earlier, due to investments as well as an appreciating dollar, which is weakening the margin,” noted Ross Mould, director of investment research at AJ Bell.
“The hope that a significant increase in earnings will keep the market weak has proven futile, though one of the elements that hit profitability, but should earn Dr. Martens some credit, is investment in the business,” Mold added.