Dr. Martens Plc shares jumped after the UK bootmaker nudged its forecasts for this year’s revenue growth higher as it charges more for its popular shoes and boots.
The shares surged as much as 22 percent on Wednesday in London, the most since the bootmaker’s first day of trading in January 2021. The company reported adjusted pretax profit rose 43 percent to £214.3 million ($270 million) in the year through March.
The UK bootmaker says it expects volume growth to remain unchanged in the coming year and the price to offset inflation effects. Retailers are bracing for a more difficult market as costs increase and shoppers have less to spend.
The bootmaker expects revenue growth in a high-teens percentage this fiscal year. It had earlier forecast mid-teens increases for the coming years.
“In an environment where cash-strapped consumers are watching every penny, the company may be a winner as people choose to focus their spending on products which will last as their bank balances take a kicking,” said Julie Palmer, a partner at Begbies Traynor. “Dr. Martens boots are famed for their durability.”
The stock has fallen 39 percent this year, compared with a 13% drop for the UK’s midcap FTSE 250 Index.
“We understand that every consumer right now is under pressure, their food bills are going up, their electricity bill is going up and therefore our strategy is we merely take price increases that offset inflation,” chief executive officer Kenny Wilson said in a phone interview.
Costs have increased 6 percent, so Dr. Martens has boosted prices by the same amount.
By Tuhin Kar and Katie Linsell
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