Companies

Yue Yuen’s footwear manufacturing business recovers in the first half

Aug 27, 2024 Hong Kong

The Hong Kong-based group reported an overall decline in revenue in its unaudited first half results, driven by Pou Sheng’s performance, as the footwear manufacturing business recovered during the period

“Order visibility improved in the first half of the year, driven by the gradual recovery of the footwear industry, alongside the Olympics, and following the completion of the destocking cycle. As a result, our manufacturing business saw a decent recovery and solid growth in profitability (…). Looking ahead, we will continue to build operational resilience, strive for sustainable development, and create value and returns for shareholders”, commented Mr. Lu Chin Chu, Chairman.

First Half Results

In the first half of fiscal 2024, the group’s total revenue totalled 4.02 billion US dollars, a decrease of 3.4% on a comparable basis to the same period of last year.

Yue Yuen’s footwear manufacturing business (including athletic/outdoor shoes, casual shoes and sports sandals) generated 2.41 billion US dollars in the first six months of the year, representing a growth of 1.3%, as compared to the same period of 2023. This figure was the result of a 9.9% increase in unit shipments to 120.7 million pairs, “amid a decent recovery trend and a further normalized order book”, partially offset by a 7.8% decline in the average selling price to 19.98 US dollars.

Overall, in the first half of the year, the group’s total manufacturing business (footwear, as well as soles, components, and others) recorded a revenue of 2.63 billion US dollars, an increase of 2.4%, on a comparable basis to the same months of the previous year.

In contrast, Yue Yuen’s subsidiary Pou Sheng underperformed during the period, reporting a 12.7% year-over-year decline in revenue to 1.38 billion US dollars. This was due to “weak store traffic amid an increasingly dynamic retail environment in mainland China”. However, according to the Chairman’s group, Pou Sheng looked to maintain its competitiveness “by introducing new store concepts and broadening category offerings”.

In the first six months of the current year, the group’s gross profit amounted to 975.1 million US dollars, reflecting a slight decrease of 0.3%, as compared to the same period of last year, while gross profit margin increased by 0.8 percentage points to 24.3%.

Yue Yuen reported a 120.6% increase in net profit attributable to owners of the company to 184.4 million US dollars, on a comparable basis to the same period of 2023.

Image Credits: Benjamin Child on Unsplash

Hong Kong Companies Footwear Manufacturing Quarter Results Results Yue Yuen