Dr Martens, a renowned boot maker, is anticipating a significant financial impact from US tariffs this year. The company, known for its iconic yellow-stitched boots, has disclosed that the majority of its footwear is now manufactured in Vietnam, a country facing elevated import duties due to the trade disputes initiated by US President Donald Trump.
As a result of these tariffs, Dr Martens is expecting a multimillion-pound reduction in profits for the year, specifically in the “high single digit” million-pound range. In response to the changing trade landscape, the company has already restructured its supply chain, moving production away from China, which previously contributed 50% of its manufacturing output, to mitigate the impact of US import tariffs.
Despite the tariff challenges, Dr Martens remains optimistic about meeting its full-year profit projections ranging from £53 million to £60 million, excluding the tariff-related losses. However, this announcement led to a more than 10% decrease in the company’s share price during early trading.
The company has outlined its strategy to counter the additional tariff costs in the coming years, aiming to completely offset the impact by 2026/27. Dr Martens plans to achieve this through stringent cost management, flexible sourcing practices, and targeted adjustments to pricing in the US market.
Recent half-year results revealed that Dr Martens has reduced its losses to £11 million for the period ending September 28, down from £12.3 million the previous year. Despite the challenging market conditions, the company saw a slight increase in sales to £327.3 million in the first half of the fiscal year.
Ije Nwokorie, the CEO of Dr Martens, expressed confidence in the brand’s resilience, noting positive developments such as a 33% rise in shoe volumes and successful launches of new products like the Zebzag Laceless boot and the 1460 Rain boot. While acknowledging the market uncertainties and consumer caution, Nwokorie affirmed the company’s belief in its strategic plans for the year ahead.
Commenting on the company’s performance, Russ Mould, an investment director at broker AJ Bell, indicated that Dr Martens is gradually progressing towards profitability. While improvements are evident, such as reduced losses and stronger sales in the Americas region, the market response has been lukewarm, with early trading showing a decline in the company’s share price, signaling some investor disappointment.