Hello, and welcome to this morning's Q3 trading update call and webcast for Dr. Martens plc. I would now like to turn the call over to Chief Executive Officer Kenny Wilson for some introductory remarks before the question and answer session. Please go ahead.
Thank you very much. Good morning and welcome everyone, and thank you for joining our Q3 trading statement conference call. I'm joined this morning in the room by Jon Mortimore, our Chief Financial Officer, and also Bethany Barnes, who heads up our Investor Relations department. If you've got any further questions following this call, please do reach out to Bethany directly for clarification. Before we open it up for Q&A this morning, I just wanted to take the opportunity to share my perspectives on our third quarter. Overall, I'm really pleased with our Q3 performance. This is our largest trading quarter, and I'm particularly pleased with our direct to consumer results, up 33% year on year to 64% of our revenue mix. Growing direct to consumer is a key part of our long-term DOCS strategy, as I think most of you are aware.
The success we continue to have on our website and in our own stores shows that this strategy is working and gives me significant confidence in the future growth and direction of the business. Our Q3 results with revenue up 15% constant currency are against a continued tough backdrop with our supply chain teams in particular having to navigate continuing long lead times and operational complexity. Also our retail teams faced renewed COVID restrictions across the world in December. Despite all of the challenges that we've had to deal with this year, we remain confident in achieving market expectations and doing exactly what we said we were going to do at the time of our IPO. This is a great result and testament to our DOCS strategy, to the phenomenal brand that we have, and also the passion of our people.
To just give you a little bit more color and detail on our Q3 performance. E-commerce growth was strong, up 16% versus last year and 85% up on a two-year view. In Q3, e-com represented 39% of our revenues and is now at 30% year to date. This gives us significant confidence around our medium term 40% mix target for e-commerce. Our retail revenue accelerated on the prior quarter, up 16% on a two-year view and double the rate we recorded in the second quarter, with conversion remaining very strong everywhere. Given the emergence of Omicron and the renewed restrictions, December was a little weaker than October and November. As with previous periods of COVID disruption, we saw strong e-commerce performance. Turning my attention to wholesale.
As we previously told you, our largest manufacturing area, which is South Vietnam, was closed for around three months over the summer. South Vietnam is about a third of our overall production. We took the decision, as we've told you before, to enter the current financial year with relatively high inventory levels. However, the Vietnam closures, coupled with extended shipping times that we've been facing, mean that we have had constrained inventory levels during the third quarter. Against this backdrop, and reminding ourselves of the fact that our third quarter is our key direct to consumer trading period, we took the decision to prioritize the inventory that we had towards direct to consumer, and that has resulted in wholesale being down 14%.
However, the vast majority of Q4 wholesale pairs have been manufactured and they are in transit by sea to our distribution centers, and then we'll ship them on to our wholesale customers. We have the pairs that we need to make our wholesale numbers in the fourth quarter. Turning my attention to the regional performance. By region, EMEA was strong with good growth across all channels. We don't report by individual country, as you know, but I will pull out Italy, which we converted to a directly owned and operated country at the start of the financial year as being a particularly strong performer. We now have three stores in Italy, with Milan opening in December, and we're really pleased with the progress that we're making in the Italian market.
Americas direct to consumer performance was very good and the wholesale dynamic, as I've just described, moderated the overall regional performance as we expected. America is obviously our biggest wholesale market, so was the most impacted by the shipment timing. Asia Pacific was weaker with our revenues down. The biggest impact here we've seen in our distributor markets, namely Australia and specifically our third-party operated stores in China as the impact of renewed COVID restrictions and concerns were felt in these two markets. If we look to our full year outturn, having completed Q3 and being well through January, when we spoke back in December, we said we had two big jobs to do as the Dr. Martens brand to deliver this year.
The first was to have a strong direct to consumer peak trading period, and the second big job was to manufacture the pairs for the fourth quarter, get those pairs onto boats and get them over to our distribution centers so we could ship them to our wholesale customers. As we sit here today talking with you, we've achieved the first. We've delivered a very strong direct to consumer third quarter. We are on track to deliver the second, i.e., we have manufactured the wholesale pairs we need, and those pairs are on boats on the route to our individual markets. Overall, we sit here today, our strategy is delivering results. Our long-term custodian mindset continues to guide our decision-making, and I have never been more enthused to lead the Dr. Martens brand forward into the future.
With that, I'm gonna hand back to the operator, and Jon and I are happy to take questions from the floor.
Thank you. Ladies and gentlemen, if you wish to ask a question at this time, please signal by pressing star one on your telephone keypad. Please ensure that the mute function on your telephone is switched off to allow your signal to reach our equipment. Again, to ask a question over the telephone, please signal by pressing star one on your telephone keypad. We will pause for just a moment to allow everyone an opportunity to signal for questions. We will take our first question today from Richard Taylor from Barclays. Please go ahead.
Yeah, morning, guys. I guess you talked a lot on the call about the sort of the inventory cycle and so on. Just looking for a bit more commentary on the degree to which the weakness in wholesale was sort of entirely driven by the absence of inventory and you prioritizing that for other channels. Or whether it was a demand issue for consumers. Any update on kind of brand heat, demand versus supply would be welcome. Thanks very much.
Okay. Thank you very much, Richard. I can start and Jon can add in where appropriate. Effectively, the weakness in wholesale in the third quarter is 100% down to lack of inventory. This really dates back to what we talked about in December, where obviously we lost the production from Vietnam for three months with those factories being closed. We knew that we wouldn't have all the pairs that we needed to meet consumer demand in the third quarter. We took the decision as a management team to prioritize those pairs towards our direct consumer channels, which are obviously the most profitable channels for us. The pairs that we need now are on boats. We know that. We know exactly where they're going and they're heading over.
The great news is the demand is still there for the brand from the wholesale channel. We've not received any significant cancellations for stock, and the wholesale customers know that Dr. Martens is a brand that's performing really well right now, which I think our DTC numbers show. They're ready to take that stock.
Just a little build for our top 20 wholesale accounts in Americas and also EMEA. We see weekly in-market inventory and sell-through data, and sell-through data for those wholesale accounts has remained strong.
Just a follow on the inventory. I think you're at sort of three months from producing a boot to it actually being in the distribution centers. Any sort of update in terms of whether that's got better or worse since you last updated the market in December, please?
I think what we said in December was all of the inventory needs to be made and on boats by about now. As Kenny said, that is the case. Our assumption is it will take, this is mainly for the U.S., from Asia to the U.S., it's 90-95 days, which was the shipment times we're seeing before Christmas. That underpins our confidence in landing the fourth quarter. What we are seeing is a slow improvement in those days. We don't assume any step change, and our forecasts do not assume an improvement from the 90-95 days. At least the mood music is slowly getting better.
We believe, Richard, that we've taken a conservative assumption, i.e., we've taken the worst that we've seen over the last couple of months, and as Jon's just said, the reality is slightly better than that.
Okay, thanks very much.
Thank you.
Thank you. We'll go to our next question now from David Roux from Bank of America. Please go ahead.
Good day, Kenny and Jon. So I've got three questions from my side. I'm just gonna ask the first and then the last two are asked together. I hope that's okay. Firstly on the shipment impact for 3Q, can you remind me, was there any specific guidance on the net sales impact from shipment delays for 3Q? Just following on from that, perhaps what was the actual net impact from shipment delays in 3Q, given the fact that you also saw the benefit of some shipments being delayed and rolled over from 2Q?
Thank you for that question. We are not gonna give that level of detail. However, what we did say back in December was we referenced that we did have scarcity of inventory in the third quarter and then would target our DTC channels in the third quarter 'cause that's, you know, seasonally the peak holiday trading period, so target those channels. We said we would then target wholesale restocking into the fourth quarter. DTC quarter Q3, that's when we make the money for DTC. Wholesale catch up in Q4. We communicated that to our larger wholesale customers. We also communicated the fact that we now we've made everything. It's on boats. The product will land through the fourth quarter. One of the benefits of having high levels of continuity product, about 80% of product is continuity.
A pair of 1460 black boots you can buy any month of the year.
Great. Thank you very much. Just my last two questions. I think if we take a step back, shares are trading at sort of 14x P/E for a business growing top line at mid-teens according to your targets. I mean, given where shares are, and I think the fact that it's below the IPO price, it seems the markets are either pricing in a demand problem for the product or perhaps is no longer confident in the long-term targets. Can you tell me whether there is a demand problem or if your confidence is at all being tested in those medium-term targets from the IPO?
I can be unequivocal in that, which is there is no demand issue for the Dr. Martens brand. I mean, I think to use your phrase, if you stand right back, revenues in direct to consumer grew 33% in Q3. I think if I remember correctly, we're 50% up on a two-year stack. You know, we gave numbers at the IPO where we said we would grow this brand high teens growth this year. We will grow high teens growth even with the headwind of our largest manufacturing country, Vietnam, being closed for just over three months. I think from our perspective as management, we don't control the share price. What we control is performance. We will deliver exactly what we said we would do 12 months ago, and we feel very confident as we look at the guidance we've given for the outlying years.
The Dr. Martens brand is strong with huge potential around the world.
Yeah. To build, we guided in the out year as a medium-term mid-teens revenue growth and on a journey to a 30% EBITDA margin, and we have remained confident in those guidance numbers.
Okay. Thanks. Just last question. As it stands today, can you remind me, does DOCS have approval for share buybacks from the board? What are your thoughts around this, just considering where shares are trading and also the fact the balance sheet has the headroom?
The whole question about capital allocation is one that the company will look at at the appropriate time. At this moment in time, carrying larger amount of cash on the balance sheet as we come out of COVID, I think is a sensible thing to do. What we didn't see this year because of timing of manufacturing, but we did guide about the year-end. We have a typical intra-year cash swing from opening balance sheet to the half-year of about half a turn of EBITDA. That is something we'd expect to see going forward. We are a highly cash-generative company. At the appropriate time, we will look at all options for that cash.
Yeah. I think the only thing I'd add to that is, you know, as Jon said, we will look at this with the board, but our number one priority is to invest in organic growth projects within the company. You know, there's an enormous total addressable market for the Dr. Martens brand, and we have key projects that we want to invest in, and that's what we'll update on at the full year.
Very clear. Thank you, gent's.
Thank you very much.
Thank you. Our next question now comes from Ed Aubin from Morgan Stanley. Please go ahead.
Yeah. Hi, good morning, guys. So maybe, sorry, the first question, sorry to come back on the third quarter, but I guess, you know, maybe the growth pattern is a bit more back-end loaded than expected by some, right? Because you just printed +21% and you're guiding or you say you're comfortable with around 55% increase three-year stack in Q4. Was that exactly in line with what you were expecting when you reported the first-half result back in December? Or, was there a change in the exit rate in December in your sales? So that's kind of the first question. Then the second question is on the price increase.
I think you've said over the past few months that you're quite comfortable that, you know, you would have it would be relatively easy for you to pass on the price increase, you know, based on the studies you've done and the reaction of wholesalers so far. There's been, as I'm sure you've seen over the past few weeks, few months, you know, a number of worries about the purchasing power of consumers in the U.S., in the U.K. and so on, and supposedly relatively imminent, you know, utility bills and so on and so forth.
I know it's a difficult question to answer, right, because you're not a macroeconomist, but, are you still as comfortable that, you know, this price increase will be passed on easily, you know, as of July, if my memory is correct? Thank you.
Thanks. I'll take the first question, then Kenny will do the second one. With regards to Q3, Q4 performance, it is exactly in line with what we anticipated was going to happen. We prioritized pairs to D2C in the third quarter. We saw 33% growth. We will be prioritizing pairs to wholesale in the fourth quarter. Wholesale, by definition, is a lumpy business. You can't do a trend from Q3 into Q4 in wholesale. It just doesn't make sense, particularly when you've had the supply chain challenges. The key for wholesale delivery is to ask the question, have you made the pairs? Yes, we have. Are they in transit? Yes, they are. Do those transit times assume a sensible period? Yes, they do. No improvement. That's the key for wholesale.
The other one, if you look at trends, you can do trends for D2C. Q4 for D2C is a very quiet quarter. Plus or minus a bit here or there for D2C won't make much difference. It's purely, Q4 is about wholesale delivery. We've made the pairs, the pairs are on boats, the lead times are sensible.
If I pick up on the second question, Ed, which is around the price increases. I first of all point out, you're right, I'm definitely not an economist. What do we know? We know that we have done the vast majority, but not all of the sell-in yet for autumn-winter 22. You are correct, the price increases take effect from July. Sitting here today, we feel very good about the way that those price increases have been received by the wholesale trade in our two biggest markets, because that's what really matters in North America and in EMEA. Overall we feel extremely good about the decisions we've taken. They're backed up by consumer research.
The wholesale trade believe that these are the right things to do for a brand that has strong demand in, you know, an environment of higher consumer inflation.
Okay, thank you guys.
Thank you.
Thank you. Our next question now comes from Karina Shooter from Goldman Sachs. Please go ahead.
Hi, Kenny, Jon, Bethany, thank you very much for taking the time this morning. I have two questions. The first one, just in terms of an update on the capacity situation in Vietnam. I remember back in December that you said it was back at around 80%. Is that still the same today? And as we see increasing COVID cases around the world and more restrictions, particularly in China, are there any other production constraints that you're seeing that could arise on your global production base more broadly? And then the second question is just with regards to the promotional environment in Q3. One would assume that that would be lower given the inventory constraints that you saw in the period. Just wanted to double-check that with you. Thank you.
Thank you, Karina. I'll take the first one on production. The first thing to say is, you know, for this financial year, the pairs that we need are made already and they're on boats, as Jon's just said in answering Ed's question. Anything I'm about to say has no impact on this financial year. In terms of our capacity in Vietnam specifically, we're still about the 80% mark. All of our factories globally are open. The Tết holiday happens in Vietnam at the end of this coming week, so we would have had a break in production anyway. We believe that post the Tết holiday, the capacity will build back into the 90s. That's what the factory owners are telling us. We feel good about that situation.
In terms of China, we have no restrictions at the moment in terms of our production. Everything is at normal levels, pre-COVID levels, so there are absolutely no issues there. We have no production issues as we sit here today, in any market in the world. I think the bit that we don't know is that we don't know what will happen with Omicron in Southeast Asia. That's the big unknown. Fundamentally though, we're always in a period that we can make more pairs in spring/summer than the business actually needs. Clearly, with uncertainty, we will make as many pairs as we possibly can right now. The short answer would have been no production issues.
On your second question in relation to promotional environment, the third quarter in relation to promotions was to get the information right. We did very few promotions in the third quarter. That's got multiple reasons behind that. The core reason, though, our strategy is to not promote our core icons. At the end of a season, you would clear, but that's not promotional activity. We do not promote core icons. If you recall back to the first half on the revenue bridge, we showed we generated an extra GBP 13 million in the first half from an improved full price mix. Part of that was in relation to having less clearance activity year-on-year, and part of it was less promotional activity year-on-year, and those trends continued through the third quarter.
Also, if you stand back, when you have scarcity of supply, you focus on full price sales. That is exactly what we've done. Seeing, you know, a lot of other brands report, that's exactly what everyone else has been doing. There's no need to promote when you have scarcity supply. Anyway, our strategy is not to promote our core icons.
Very clear. Thank you.
Thank you very much.
Thank you. We have a question now from Doriana Russo from HSBC.
Yes, good morning. Can you hear me? Yes.
Yep, we can, Doriana. Yep.
Thank you. I just wanted to come back to the promotion and the expected sort of the seasonality in the business. If I remember correctly, last year your rate of full price sales was incredibly high because of the pandemic. What shall we expect for this year, given the sort of inventory constraint that you're still facing? My second question is on Asia. You pointed out that the sort of distributor-led market like China and Australia have been weak.
Can you give us a little bit more color on Japan, please, and also on sort of the activities that you might be doing in China, which is one of these sort of priority markets which has the top opportunity for revenue in the longer- term?
Okay. Why don't I start, Doriana, and then Jon can build. In terms of your question around promotions, effectively, we do have a -- If we take our direct consumer business, I think we've quoted this number historically where we said about 90% of our sales are at full price and 10% is marked down. Obviously, with the fact that we've got two factors going on. One is there's been scarcity of product, and that basically means when you've got scarcity of product, you don't need to take any promotions. We do have some seasonal products which have arrived late, and obviously those seasonal products at some point will need to be marked down. The reality is this is a continuity carryover long-term business.
The 90%, 10%, we think that will broadly be the same again this year. In terms of Asia Pacific, you know, we've not gone into all of the detail market by market. We did see during the third quarter when the national lockdown eased in the Japanese market that we really saw an immediate pickup in Japan retail sales and then Japan tightened down again in December which made things a little bit more difficult. I'll let Jon talk to the Australia and China piece. Overall, I think the thing to remember is that in the short- to medium- term, the largest growth of the Dr. Martens brand will come from the Americas and EMEA regions.
Yeah. I think with regard to Omicron or impact of COVID in terms of China and Australia, while we don't get the sort of key data that we get for European markets, it's more the concern around how those countries are actually individually managing COVID. We did see weakness in our third party retail stores, distributor-led retail stores in China. Similarly in Australia, where we sell through a distributor, we saw weakness in that distributor's wholesale stores and also that distributor's branded Dr. Martens stores. It's just in line with, I think, what we've seen for a while. You see these things come and go and puts and takes. With regard to China, your second part of the question, just remind everyone that China, while it is a long-term opportunity, China today only represents 4% of revenues.
We've made good progress in China. If you go looking back over the past year or so, Derek, the Regional President, joined in September 2019 with the experience and heritage of working in China. We're building a team in China. We've gone from 9 to 25 people by the end of the last financial year, and further people have been added since then. In the first half, we talked about recruiting our new General Manager for China, Olga, who has a great track record in that market. With our new GM in place, you can expect we'll be looking at how we can build on that to implement a DOCS strategy in China, which we haven't formally implemented to date, but it's too soon to talk about anything about that at this moment in time.
Okay. Can you give us a sense of whether your direct channel in China did better than the overall country?
We're not giving that level of detail. China was predominantly driven by a weaker distributor market, which is retail wholesale, the distributors of retail, as was Australia.
Thank you. We'll go to our next question now from John Stevenson from Peel Hunt.
Hi. Morning, guys. Couple of questions. I don't know, again, if you wanna go to this detail, but just looking at the U.S. market, I think the ratio of wholesale to retail used to be about 2 to 1. I don't know if you can sort of comment on how, obviously, DTC has been particularly strong. Can you give a bit more detail on the DTC in the States or maybe some of the flags in terms of just sort of showing progress over Q3? Second question. I think we've covered stock, but I've got one more. Just in terms of current availability and stock levels, I get you can obviously rebuild over summer and I get that the Q4 orders for wholesale are all on the water.
Where are you now in terms of sort of current stock level, current availability? Are you still basically chasing manufacturing into spring, or are you sort of comfortable with where you are and, you know, being able to produce more over summer?
Okay. Why don't I start? On the USA market, you know, as you point out, it is our biggest wholesale market in the world. Obviously the decisions we take, we took to prioritize inventory impacted the United States more. The direct to consumer performance in the United States was very strong in the third quarter and particularly strong in the period between Thanksgiving to Christmas. Overall, we feel very good about underlying demand in the USA. As Jon also said, we get both sell through and in-market inventory from our top 20 accounts in the United States. Inventories are low. I mean, that's the reality of the situation. The demand is there for the brand, but the inventories are low. If we look at your question around current availability, are we still chasing production?
Yes, is the honest answer. I mean, we had the loss of three months of supply from Vietnam. I think we've used the inventory that we've had as well as we possibly could have done, and we've prioritized that inventory to our highest margin channels. There is no doubt that the demand for the Dr. Martens brand is greater than the availability that we've had. If you look at the first half of the year, as I said earlier, we have got the capacity to make more pairs than a normal demand. We will start to rebuild our inventories as we move forward. Yes, short answer is, demand has outstripped supply in this instance.
Okay. Brilliant. I mean, I guess the flip side of that is when you reckon you'll be able to sort of meet demand levels. Are we talking kind of autumn time or?
Yeah, I mean, I think it's, you know, it kind of links to a question we had earlier, you know, from Karina, which is all factories are now open. You know, all factories are open. We're making as many pairs as we can. The great thing is that these are continuity products. The reality is, it's very difficult for me to answer that question because we don't know what we don't know right now. If all things go well and there are no major Omicron incidents, yes, in the second half of the year we'll be in more close to the situation we wanna be in. Based on what we know now, we remain confident in the expectations for next year.
Okay. Brilliant. That's very clear. Thank you.
Thank you very much.
Thank you. We'll go to a question now from Piral Dadhania from RBC. Please go ahead.
Hey, morning, everybody. Thank you for taking the questions. I just wanted to start by asking as you prioritize wholesale in your fiscal Q4, is the DTC channel fully stocked? Are you still able to sort of meet demand as and when it arrives? I appreciate it's not the biggest quarter. Just wanna make sure that, you know, that there's no sort of switching in the other direction away from DTC in Q4 as we saw in Q3. That's my first question. The second is, do you have any sort of view based on how the second half will play out as to what the channel mix might look like by year end? Is there a chance that DTC is actually a bit higher than where we and maybe you are expecting come December or even before that?
On the back of that, is there then potential for a slightly better gross margin outcome just based on the higher retail mix? Finally, I just wanted to ask if you have any visibility on what any potential distributor market conversions you might be doing in 2022. Thank you.
Okay, thank you for the questions. I'll probably take one and three, and Jon will take question two. To answer your question about the fourth quarter, are we fully stocked in direct-to-consumer? I wouldn't say we're fully stocked. Are we well stocked? Yes. Our EMEA business, our Asia Pacific business, and our Americas business have good inventories available for our websites and for retail. It's a relatively small quarter for direct-to-consumer. We have the product available to meet our numbers, so overall we feel good about that. You know, when Jon talked about the fact that we've prioritized pairs for wholesale, those are to meet commitments to our customers, and with what we've got in boots, we're confident that we will be able to meet those commitments.
Overall, it's not like you're gonna see some massive swing in that, you know, direct to consumer will underperform 'cause we prioritize pairs to wholesale. We're entering the fourth quarter with decent inventories in our DTC business.
Yeah, following on from that, would we see any material change to where average consensus is for DTC mix the year, full year? Not really, no. It's gonna be there or thereabouts, Piral. I think if you take the one as an example, e-comm mix after nine months, 30% revenue mix in line with last year. Last year for the full year was 30% e-comm mix. We've guided to about 30% e-comm mix for the full year this year for a number of months now. We're gonna be there or thereabouts. I don't see any material upside. Similarly, the pairs will land for wholesale. I don't see any material downside either.
On your third question, which was around distributor market conversions, as we look to FY 2023, we're not planning new conversions next year. I think as we've said before, the conversion strategy where we implement DOCS in a country is a multiyear effect. We've seen that with Germany, where it just keeps improving year-on-year. Obviously, we took Italy back in the second half of this financial year, so autumn/winter 2021. We'll get that second year of growth in the Italian market as we continue to push on DOCS implementation.
I think we said before also that we've taken back Spain and the Nordics, but we haven't really pushed those in the way that we've put time, effort, energy and resources into the Italian market, as an example. I think that's probably the biggest difference you'll see. You know, Germany and Italy will continue to move forward and build the brand. We'll put more effort on Spain and the Nordics in financial year 2023 than we have done since we took those markets back.
Okay, thank you.
Thank you.
Thank you. As a reminder, ladies and gentlemen, to ask a question over the telephone, please signal by pressing star one on your telephone keypad. We'll now go to our next question from Kate Calvert from Investec. Please go ahead.
Morning, everyone. Just one from me. When you were proactively managing this business through COVID and the shipping issues over the last quarter, stroke, I suppose Q2, were there any projects which had to go on the back burner in terms of manufacturing, supply chain? Sort of any inefficiencies which you'll be able to go after in the year ahead, which you haven't been able to do in the last year?
Yeah. Go on. Sorry, Kate. We were about to speak over the top of each other. I think my view would be the only thing that we would probably have got after that we haven't would be optimization of country of origin to country of sale. Because when we were losing pairs in Vietnam, obviously we moved some pairs to China. We know for certain markets like China to Japan, there's reasonably high duty on that, whereas Vietnam to Japan is a zero duty route. We prioritize enabling growth and getting the pairs we needed over duty optimization. For sure, at the point where we've caught up and we've got all the pairs we need, then we can start to look at that duty optimization opportunity.
I don't know what Jon was gonna say 'cause we were both about to start at the same time, but that would be the one for me. Say exactly the same thing.
Oh, that's good that you agree. Can I just have a second question? On Europe, how much of the growth in Europe was driven by the conversion market of Italy and Germany? Or to put it another way, can you give a bit more color on what was happening outside of those markets?
I think our growth was very broad-based in Europe. You know, our oldest and most established in our home market, the U.K. grew strongly, Germany grew strongly. The conversion market of Italy grew strongly. It was as we said in the statement, it was also multi-channel as well. You know, we saw good channel growth as well. I think it was pretty broad-based, our growth. I called out Italy specifically earlier because of the fact that, you know, it is larger than the average, but we had very broad-based growth. Yeah, the thing with Italy as well is there's been a lot of questions we've had around how is the conversion going 'cause of the multi-year opportunity that a successful conversion gives us.
We're calling out to say, we're very pleased with conversion opportunity, and we're tracking exactly in line with where Germany would expect us to be.
Great. Thanks so much.
Thank you. As we have no further questions at this time, I'd now like to hand the call over to your Chief Executive Officer, Kenny Wilson, for any additional or closing remarks.
I'd just like to say thank you very much for everyone who asked us a question and also to everyone who's attended the call for your interest in the Dr. Martens brand. As we said at the beginning, we've had a good quarter driven by very strong e-commerce and retail performance. You know, we're very confident that we will achieve market guidance as we outlined in our statement. Thank you very much.
Thank you. This will conclude today's conference call. Thank you for your participation, ladies and gentlemen. You may now disconnect.