Companies

Yue Yuen talks of a gradual recovery trend

May 16, 2024 Hong Kong

The Hong Kong-based footwear group saw a 4.9% decline year-over-year in the first quarter of 2024, but highlighted the 9.1% shoe shipment volume increase due to a more normalised order book

“The Group is optimistic about the long-term prospects of its manufacturing business and is confident that the gradual recovery trend taking place in the industry, alongside improving order visibility, will allow the further normalization of its order book”, said the company in a statement. However, due to an “uncertain macroeconomic environment driven by persistent inflation, high interest rates, as well as regional conflicts and its impact on shipping lanes”, it remains caution in the short term.

In the first three months of the current fiscal year, Yue Yuen reported a revenue of 2.0 billion US dollars, which reflects a decrease of 4.9% on a comparable basis to the same period of 2023.

The footwear manufacturing activity contributed 1.15 billion US dollars to the group’s total first quarter revenue, a slight decrease of 0.9% as compared to the same period of last year. The volume of shoes shipped increased by 9.1% to 58.0 million pairs “pairs amid a gradual recovery trend and a more normalised order book”, but the average selling price declined 9.2% versus the prior year to 19.55 dollars.

Including the manufacture of soles, components, and other products, Yue Yuen’s manufacturing business in the first quarter of the year generated a revenue of 1.25 billion US dollars, remaining stable on a comparable basis to a similar period in 2023.

The Pou Sheng’s subsidiary* underperformed at the start of the year, with a revenue decrease of 12.0% to 749.7 million US dollars, as compared to the first quarter of last year. In renminbi terms, revenue was down by 7.5% year-over-year, thanks to “the increasingly dynamic retail environment and a high base effect, despite the relatively resilient performance of its omnichannel”.

The group’s gross profit in the period increased by 1.1% to 503.1 million US dollars, on a comparable basis to the prior year’s first quarter. This was a result of a 20.2% increase in gross profit in the manufacturing business largely offset by a decrease in gross profit in Pou Sheng.

In the three months ended in March, the profit attributable to the owners of the company totalled 100.0 million US dollars, an increase of 96.9% as compared to 50.8 million US dollars in the same period of 2023.

*Sales of the Group’s retail subsidiary in the Greater China region, including shoes, apparel, commissions from concessionaire sales and others.

Image Credits: bady abbas on Unsplash

Hong Kong Footwear Manufacturing Quarter Results Results Yue Yuen