Companies

Stella Holdings ends the year on a gloomy note but full year performance holds up

Jan 13, 2025 Hong Kong

An increase in sports orders helped the Hong Kong-based footwear manufacturer end the year 2024 with revenue up by 3.5% year-over-year, but the fourth quarter ended on a gloomy note

Stella Holdings’ unaudited fourth quarter revenue decreased by approximately 1.1% to 385.4 million US dollars, as compared to the same period last year. However, unaudited full year 2024 revenue still increased by approximately 3.5% to 1.55 billion US dollars, as compared to the prior year.

In particular, the footwear manufacturing business recorded a 0.7% revenue decline to 377.7 million US dollars in the three months ended on the 31^stof January, as a 3.0% increase in volume was offset by a 3.1% decline in average selling prices (ASP).

The business segment still reported a 3.5% year-over-year increase in full year revenue to 1.50 billion US dollars, mainly driven by an 8.2% increase in shipments of sports and fashion products. However, the full year ASP also declined 4.4% year-over-year due to the higher proportion of sports orders, which have a lower ASP, as well as raw material price deflation.

Stella Holdings said it’s still ahead of schedule in achieving its three-year plan (2023-2025) targets of a 10% operating margin and low teens compound annual growth rate in profit after tax by the end of 2025, having already achieved and exceeded the above operating profit margin target in both 2023 and the first half of 2024.

“We look set to exceed our margin expansion goals for this year as we continue to benefit from our diverse customer portfolio, with increased orders from customers in higher-margin categories. We believe this trend will continue into 2025 as we onboard more of these customers, commence production at our new production facility in Bangladesh and continue ramping up production capacity in Indonesia in 2025”, Mr. Chi Lo-Jen, Chief Executive Officer of the group.

The company also remains committed to returning additional cash to shareholders of up to 60 million US dollars per year over 2024-2026, not exceeding a total of 180 million US dollars.

Image Credits: Chester Ho on Unsplash

Hong Kong Companies Footwear Manufacturing Quarter Results Results Stella Year Results