“While 2022 posed more challenges than expected, we navigated these well, delivering higher gross and operating profit margins as we implemented our growth strategies and improved our product and customer mix. This is convincing proof that we are on the right path to secure future profitability growth and returns for our shareholders”, commented Mr. Chi Lo-Jen, Chief Executive Officer of the Group.

Full Year Results

Stella International had a consolidated revenue increase of 5.9% to 1.63 billion euros over 2022, on a comparable basis to the prior year, despite an annual shipment volume growth of only 0.4% to 56.0 million pairs.

Last year, the company's operating profit rose by 30.9%, totalling 134.8 million US dollars, as compared to fiscal 2021, due to “higher revenue, an improved customer mix, enhanced production efficiency and cost controls”.

The group's net profit amounted to 117.2 million US dollars in 2022, which reflects an increase of 29.1% over the previous year.

Fiscal 2023 Outlook

Stella acknowledged that is facing strong headwinds this year, as compared to 2022, as “weakening economies and global inflation” have been impacting consumer sentiment in both North America and Europe, in addition to inventory challenges faced by some of their customers in the sports and casual segments. Still, the removal of COVID-19 restrictions in China at the end of last year may influence positively the company's activity, especially in the second half of the year.

Three-Year Plan (2023 – 2025)

“As we continue to implement our strategies, we are optimistic about our medium and long-term growth. The goals for our Three-Year Plan (2023 – 2025) are to achieve an operating margin of 10% and low-teens annualised growth rate on profit after tax during the period”, stated Mr. Lawrence Chen, Chairman of the Group.

To that end, Stella plans to enhance its category mix by strengthening its relationship with major global Sports brands, as well as reaching out to other luxury and high-end fashion brands. It also intends to expand and diversify its manufacturing capacity, including ramping up production in the new factory in Solo, Indonesia, working with a major brand partner to jointly develop an exclusive sports footwear factory in Indonesia and boosting production capacity in Bangladesh, starting this year. At last, it aims to optimize management effectiveness and efficiency - strengthening cost efficiency and improving working capital – and increase operational efficiency.