Companies

Stella Holdings reports first half growth driven by the sports category

Jul 19, 2024 Hong Kong

Unaudited results for the second quarter and first half of 2024 show that the Hong Kong-based manufacturer’s growth has been driven by an increase in shipments in the sports category

Overall, Stella Holdings’ unaudited consolidated revenue in the second quarter that ended on the 30^thof June was approximately flat year-on-year at 431.6 million US dollars. For the first half of the year, however, the company reported an unaudited consolidated revenue of 770.0 million US dollars, up by 7.7% from 716.0 million US dollars in the same period of last year.

Footwear Manufacturing Business.

In the second quarter of fiscal year 2024, the group’s unaudited consolidated revenue totalled 422.5 million US dollars, an increase of 0.7% as compared to the same period of the previous year. This was the result of a 5.7% year-on-year increase in volume to 14.8 million pairs and a 5.0% year-on-year decrease in average selling price per unit to 28.7 million dollars.

Looking at the first half of the current year, Stella’s unaudited consolidated revenue reached 748.8 million US dollars, up by 7.4% on a comparable basis to the same period of last year. This result was driven by a 12.3% year-on-year increase in volume to 26.5 million pairs and a year-on-year decline of 4.4% in the average selling price per unit to 28.3 million US dollars.

“We are pleased to see the strong volume growth at the beginning of the year extend into the second quarter as we continue to see strong demand across all of our product categories, led by Sports”, commented Mr. Chi Lo-Jen, Chief Executive Officer of the group. In fact, the decrease in the average selling price in both periods was due to the higher proportion of orders in the sports category, which has a lower price.

Based on these preliminary results, the company expects to achieve a first half record net profit of not less than 90.0 million US dollars, as compared to a net profit of 55.2 million US dollars recorded in the same months of fiscal year 2023.

Stella Holdings attributes this forecast to growth in shipment volumes, driven by the sports category as previously mentioned, as well as earlier shipments to certain customers, an improved customer mix and improved operating leverage as a result of increased utilisation of the sports manufacturing facilities.

On balance, the group remains on track to achieve its Three-Year Plan (2023-2025) targets of a 10% operating margin and a low teen compound annual growth rate in profit after tax by the end of 2025.

Image Credits: Ruslan Bardash on Unsplash

Hong Kong Footwear Manufacturing Quarter Results Results Stella