Famed boot manufacturer Dr. Martens anticipates a significant financial impact from US tariffs this year. The company, known for its iconic yellow-stitched boots, has moved its production predominantly to Vietnam due to increased import duties stemming from the trade disputes initiated by US President Donald Trump.
Dr. Martens expects a multimillion-pound hit on its profits due to the tariffs. The company has already transitioned its supply chain away from China, previously responsible for half of its production, in order to mitigate the effects of US import tariffs.
Despite the tariff challenges, Dr. Martens remains optimistic about meeting its full-year profit forecasts, ranging between £53 million and £60 million in underlying pre-tax profits. However, these projections do not account for the impact of the tariffs.
The company is committed to offsetting the additional tariff costs starting from the next fiscal year. Dr. Martens plans to achieve this by implementing strict cost controls, adjusting product sourcing strategies, and making targeted changes to its pricing policies in the USA.
In the recent stock market update, Dr. Martens reported a reduction in losses to £11 million for the first six months ending on September 28, compared to £12.3 million the previous year. Additionally, sales saw a slight increase of 0.8% to £327.3 million in the first half of the fiscal year.
Chief Executive Ije Nwokorie expressed confidence in the brand’s performance, citing a 33% rise in shoe volumes and successful product launches. Despite market uncertainties and consumer caution, the company remains positive about its strategies for the year ahead.
Investment Director Russ Mould noted Dr. Martens’ progress in steering the business towards profitability, acknowledging the gradual nature of the recovery process. While there are promising signs in the half-year results, such as improved full-price sales and better performance in the Americas region, investor response has been tempered, with a decline in the company’s share price indicating some disappointment.