“The ramp-up of our new factory in Solo, Indonesia, along with the buildout of an additional production facility in Bangladesh, is progressing as planned. Our enhanced manufacturing footprint will help us optimally serve new sports customers in the upcoming year, while freeing up more of our existing capacity to produce higher-margin products for our growing number of high-end Fashion and Luxury customers”, commented Lawrence Chen Li-Ming, Chairman of Stella, in the company’s unaudited third quarter results.

Stella reported a modest 0.6% increase in consolidated revenue for the three months to September 2024, as compared to the same period in 2023, bringing total revenue to 389.7 million US dollars. Meanwhile, revenue for the first nine months of the year grew by 5.1% over the same period last year, reaching 1.16 billion US dollars.

Shipment volumes increased by 5.7% in the third quarter and by 10.1% year-to-date, as compared to last year, primarily driven by the rising demand for sports footwear. However, the average selling price (ASP) continued to decline, reflecting the higher proportion of sports products, which typically have a lower ASP and a drop in raw material prices.

Growth in the third quarter slowed slightly compared to previous quarters, following early shipments to customers in the second quarter of 2024. This was expected and in line with Stella’s overall shipment plan. Despite this, the company remains on track to achieve its strategic goals.

Stella’s three-year plan is to achieve an operating margin of 10% and a compound annualised growth rate in profit after tax in the low-teens digits by 2025. The company has already exceeded its operating margin target in 2023 and in the first half of 2024.

Stella has also reaffirmed its commitment to returning cash to shareholders. The company has committed to distribute up to 60 million US dollars annually through share repurchases and special dividends on top of regular dividend payments. This initiative aims to return up to 180 million US dollars between 2024 and 2026.

Looking ahead, Stella remains focused on maintaining its growth momentum. “We remain on track to meet our goals for this year, including enhancing our customer and product mix and strengthening our operational efficiency, which will enable us to continue meeting the profit targets set out under our three-year plan (2023-2025)”.