Dr Martens warns profit margins set to fall this year

Dr Martens has warned that its profit margins will fall this year as it invests in infrastructure to solve operational problems and boost future growth.

The bootmaker has faced a series of marketing and distribution issues in the US over the past year. On Thursday it revealed that the problems had driven pre-tax profits down by a quarter to £159mn, and warned that there would be more pain to come.

“The operational issues . . . have demonstrated that continuing to invest in our infrastructure and capabilities to support our increasing scale and underpin our long-term growth is the right thing to do,” the company said in a statement.

Margins at the level of earnings before interest, tax, depreciation and amortisation dropped 4.5 percentage points to 24.5 per cent in the year ended March 31. Dr Martens said on Thursday that they would drop another 1 to 2 percentage points in the current year.

The shares dropped 11 per cent in early trading in London. They have almost halved in value over the past year.