Dr. Martens Returns to Profit Growth: Adjusted PBT Surges 61% in FY26

Dr. Martens has put in a much better set of numbers than the headline revenue line might suggest. Yes, sales dipped a touch, but profits, margins, cash generation and debt all moved in the right direction. For retail investors, that matters because it suggests the turnaround is becoming real in the income statement, not just in management presentations.

The big message from this FY26 update is simple: Dr. Martens is selling a bit less, but selling better. It has pulled back on clearance and off-price activity – meaning fewer discounted sales – and that has lifted profitability sharply.

Dr. Martens FY26 results show profit growth is back despite lower revenue

For the 52 weeks ended 29 March 2026, revenue was £764.9 million, down 2.9% on a reported basis and down 1.4% at constant currency. Constant currency means stripping out foreign exchange movements to show the underlying trading picture.

That softer revenue number did not stop profits improving strongly. Adjusted profit before tax, or adjusted PBT, rose 61.3% to £55.0 million, while adjusted EBIT rose 30.6% to £79.3 million. Adjusted figures remove exceptional and non-core items, so they give a cleaner read on everyday trading.

Key FY26 numbers	FY26	FY25
Revenue	£764.9 million	£787.6 million
Adjusted EBIT	£79.3 million	£60.7 million
Adjusted PBT	£55.0 million	£34.1 million
Reported PBT	£32.7 million	£8.8 million
Gross margin	66.2%	65.0%
Net debt including leases	£213.5 million	£249.5 million
Dividend per share	2.55p	2.55p

That is a strong improvement in quality. Reported basic EPS rose to 2.5p from 0.5p, while adjusted basic EPS climbed to 4.2p from 2.4p.

Why lower Dr. Martens revenue is not the main story in these preliminary results

The company deliberately reduced clearance activity in both direct-to-consumer, or DTC, and wholesale. DTC means sales through its own shops and ecommerce. Wholesale means selling to third-party partners.

That choice weighed on revenue in the short term, but it improved the quality of sales. Full Price DTC revenue grew 0.6% and Full Price DTC mix improved by 3 percentage points. Gross margin rose by 120 basis points to 66.2%, and non-marketing operating costs fell by 6.0%.

In plain English, Dr. Martens is making more money from each sale and keeping tighter control of costs. That is exactly what you want to see from a premium brand trying to rebuild credibility.

There is a trade-off, though. Pairs sold fell 2.5% to 10.2 million. So this recovery is being driven by better pricing and less discounting, not by booming volumes. That is positive for margins, but it needs to hold up once the business pushes into its next growth phase.

Americas strength and EMEA weakness define the Dr. Martens regional picture

The Americas was the standout region. Revenue there fell 3.5% on a reported basis, but grew 1.1% at constant currency. Full Price DTC revenue was up 14%, while retail revenue grew 8.2% at constant currency. Adjusted EBIT in the Americas almost doubled to £27.0 million from £13.6 million.

EMEA was more mixed. Revenue fell 1.7% reported and 3.7% at constant currency. Wholesale was good, up 7.6% at constant currency, but DTC struggled as consumers leaned harder into clearance, especially in the UK and DACH. That matters because EMEA is the biggest region, with revenue of £377.5 million.

APAC was broadly flat, down just 0.3% at constant currency. The quality of sales improved there too, with Full Price DTC revenue up 15% and mix up 8 percentage points. South Korea looks especially strong.

My read is that the turnaround is genuine, but incomplete. The US is clearly healthier. Europe still needs fixing.

Shoes growth, premium pricing and product mix helped Dr. Martens margins recover

Product is another bright spot. Shoes revenue jumped 19% and now makes up 31% of group revenue, up from 26% last year. Newer product families including Lowell, Buzz and Zebzag now account for 9% of pairs, triple the FY25 contribution of 3%.

That matters because it shows the brand is expanding beyond its classic boot base. Boots still account for 52% of revenue, but boot revenue fell 8%. Shoes becoming a bigger driver reduces concentration risk and gives Dr. Martens more ways to grow.

There were still weak spots. Sandals revenue fell 11%, and management said it does not expect a significant improvement until SS27 when the redeveloped range launches. Bags and accessories were better, with revenue up 15%.

One especially encouraging detail is pricing. Products priced above £220 were the fastest-growing DTC price band and doubled in FY26, albeit from a small base. For a premium brand, that is a healthy sign.

Dr. Martens cash flow, debt reduction and dividend all point to a sturdier balance sheet

The balance sheet improved nicely. Net bank debt fell to £69.7 million from £94.1 million, while net debt including leases fell to £213.5 million from £249.5 million. Cash rose to £180.3 million from £155.9 million.

Operating cash flow was £141.1 million. Inventory dropped to £160.8 million from £187.4 million, and leverage was 1.4 times, down from 1.8 times, against a covenant limit of less than 3 times. That gives the group more room to invest and absorb bumps in trading.

The dividend was maintained at 2.55p per share, including a final dividend of 1.70p. That looks supportive, although the payout ratio was 103% of profit, so investors should note that the dividend is currently being held rather than grown.

US tariffs, store impairments and transformation costs explain the gap to reported profit

Reported profit was lower than adjusted profit because of several charges. Exceptional costs were £12.1 million, including £9.9 million of IEEPA-related US tariffs following a US Supreme Court judgment. The group has not recognised a refund asset yet, even though it expects to claim the full amount, because that recovery is not yet considered virtually certain.

There were also £6.9 million of transformation costs and £4.2 million of non-cash impairment charges tied to 15 underperforming stores. None of that is ideal, but it does mean the underlying trading performance was better than the reported PBT number of £32.7 million suggests.

Dr. Martens FY27 outlook points to further profit growth but not a smooth ride

Management says it expects further strong PBT growth in FY27, helped by operational leverage, pricing, stronger wholesale order books and continued cost control. It also guided to capex of around £30 million and net debt of around £200 million including leases.

Still, this is not a risk-free story. The company flagged an unpredictable trading environment, geopolitical uncertainty and weaker consumer confidence. It also warned that executing the retail strategy will create a short-term revenue headwind.

That means FY27 could be another year where profit improves faster than sales. Investors should be fine with that, provided the brand keeps getting healthier and does not slip back into discount-led growth.

What the Dr. Martens FY26 RNS means for retail investors

This was a good update. Not perfect, but good. The best part is that the recovery is showing up where it counts – margins, cash flow, debt reduction and adjusted profit.

The main positive is that Dr. Martens appears to be regaining control of its brand economics. The main negative is that EMEA DTC is still under pressure, sandals remain weak, and revenue is not growing yet.

Overall, this feels like a retailer and brand owner moving from repair mode into something more credible. If FY27 brings the further strong PBT growth management is targeting, investors are likely to become more confident that Dr. Martens can hit its medium-term goals. For now, this looks like solid progress rather than a finished turnaround.