(Reuters) – British bootmaker Dr. Martens on Thursday warned that its annual core profit margin would be lower than last year because of weaker-than-expected demand ahead of the busy Christmas season, increased investments, and a strong dollar.
Shares of the company fell about 18% in early trade.
Inflation in Britain last month touched a 41-year-high, as rising prices of everything from energy to food forced households to curtail purchases of non-essential items.
Dr. Martens, whose boots have been worn by the likes of British guitarist Peter Townshend, said its revenue in the six months ended on Sept. 30 rose 13% to 418.6 million pounds ($505.92 million), helped by price hikes.
The group, known for its chunky boots with yellow stitching, now expects core earnings margins for the full year to be between 100 basis points and 250 basis points lower than last year.
The company’s direct to consumer (DTC) growth in the second quarter was slower than anticipated, it said, adding that its peak trading weeks were still ahead.
Dr. Martens also raised its interim dividend by 28% to 1.56 pence.
(Reporting by Radhika Anilkumar in Bengaluru; Editing by Rashmi Aich)
