In the first quarter of 2022, the group reported total revenue of 2.39 billion US dollars, which reflects a decline of 4.0%, as compared to revenue of 2.49 billion US dollars in the same period of 2021. Yue Yuen highlighted that the performance of the manufacturing business was "largely offset by weak retail sales in Mainland China" thanks to the resurgence of COVID-19 outbreaks.

Revenue generated by the footwear manufacturing activity in the first three months of the current fiscal year (including athletic/outdoor shoes, casual shoes and sports sandals) grew by 14.8%, totalling 1.39 billion US dollars, as compared to the first quarter of last year. In this period, the company shipped 70.9 million pairs of shoes (up by 3.8%), at an average selling price of 19.65 US dollars per pair. The company noted that the price increased by 10.5% due to the "strong demand for the Group’s high-end footwear, as well as its ongoing efforts to refine its product mix and obtain more high-value orders".

In the first three months of 2022, Yue Yuen’s manufacturing business (including footwear, as well as soles, components and others) revenue amounted to 1.53 billion US dollars, reflecting an increase of 12.2%, as compared to similar period last year.

Revenue attributed to the group’s retail subsidiary, Pou Sheng, dropped by 23.5% in the three months to the 31^st of March, adding up to 862.5 million US dollars,  on a comparable basis to revenue of 1.12 billion US dollars in the same period of 2021. The result was credited to the "weak foot traffic in the shopping venues and cities where Pou Sheng operates following COVID-19 lockdowns and local government’s closed-loop management across mainland China".

In the mentioned period, the group’s gross profit decreased by 10.5% to 568.3 million US dollars, and the gross margin fell by 1.1% to 17.1% in this period, on a comparable basis to similar period of the prior year.  

2022 Outlook

While Yue Yuen is "cautiously optimistic about the continued growth of its manufacturing business with global demand for its footwear products remaining solid”, it also warns about the short-term risks posed by the COVID-19 resurgence in Mainland China, as well as by labour supply in certain Southeast Asian countries. The group is also watching closely the increasingly volatile global market conditions caused by growing inflation, interest rate hikes and geopolitical tensions.