Dr Martens shares fall on expected slower revenue growth

By

Nigel TAYLOR

Published
Jan 28, 2022

It may have delivered a trading update on Thursday in which its sales soar, but Dr Martens shares fell on the news as investors worried over its future growth prospects.

The firm’s shares fell as much as 14% after the release, and although they recovered by a few percent on Friday morning, they were still only two-thirds of what they’d been on its first share trading day exactly a year ago when it first listed. That means its market value of around £3 billion.

The company is suffering some from the problem that’s also partly behind the share price fall at THG — too-high expectations.

Both companies listed with market values that seemed way out of sync with their sales and profit figures. That means anything other than stellar growth means the share price goes into reverse with all the negative publicity that brings with it.

Given that Dr Martens also said in the trading update that the current quarter and the next one tend to be its quietest, and that Asia Pacific struggled due, it led many investors to run for the hills.

Yet despite the share price fall, the company remains a well-managed one with a superstar brand and a target consumer who’s showing no signs of falling out of love with it. It’s open to question whether the share price will rise further if results improve or whether the company is now sat at a more sensible valuation for the long term. We’ll have to wait and see.