Companies

Demand for premium styles offsets the decline in Stella’s shipment volumes

Oct 25, 2023 Hong Kong

The Hong Kong-based group posted its third quarter and nine months results, emphasising that the decline in shipment volumes was partially offset by an increase in average selling prices

“Our performance remains in line with our expectations, with the continued transition of our customer mix from the Casual to Luxury and high-end Fashion categories making year-on-year volume and revenue comparisons less pertinent. We expect the ASP for the full year of 2023 to remain elevated as customers request more premium products with higher production complexity”, commented Mr. Chi Lo-Jen, Chief Executive Officer of Stella Holdings.

Third Quarter Results

In the three months that ended on the 30^th of September, the group’s manufacturing revenue declined to 377.1 million US dollars from the 453.6 million US dollars reported in the same period a year earlier.

The shipment volume decreased by 18.7% year-over-year in this period to 12.2 million pairs of shoes, “due to a shift in the focus of our customer mix and destocking by some customers to manage their inventory issues”, while the average selling price rose to 30.8 US dollars from 30.2 US dollars.

Stella added that its unaudited consolidated revenue* in the third quarter of the current fiscal year totalled 387.2 million US dollars, down by 15.9% from a similar period in the previous year.

Nine Months Results

At the end of September, the group’s manufacturing revenue amounted to 1.07 billion US dollars, decreasing from the 1.26 million US dollars recorded in the same period of fiscal 2022. In this period, its shipment volume was down by 18.8%, while the average selling price increased to 30.0 US dollars from 28.6 million US dollars in the same period a year ago.

Furthermore, in the first nine months of 2023, Stella’s unaudited consolidated revenue* declined by 14.3%, as compared to the same period of the prior year, reaching 1.10 billion US dollars.

Outlook

Nevertheless, Stella International Holdings said that it remains confident that it will reach the medium-term goals of its Three-Year Plan (2023–2025), namely, achieving an operating margin of 10% and a low-tens annualized growth rate on profit after tax during this period.

*Includes the manufacturing business, branding business and other businesses, after elimination of inter-segment sales

Image Credits: Trent Erwin on Unsplash

Hong Kong Companies Footwear Manufacturing Quarter Results Results Stella