Stella International saw revenues for the six months to June 30 advance by 5.7 percent to $762.4 million. Volumes also rose, with 27 million pairs of shoes shipped - an increase of 6.3 percent over the year-ago period.
The company attributed this performance to increasing demand for “fashion athletic products” and to “stabilizing demand” for its casual and fashion footwear products.
Fashion footwear was the biggest contributor to its overall revenues, accounting for 36.0 percent of the total turnover and 29 percent of the total volume. The contributions from casual footwear and fashion athletics were 29.3 percent and 28.8 percent, respectively.
Shipments increased by 6 percent to 27.0 million pairs, but average selling prices declined by 2 percent to $26.60 per pair. While sales of men's shoes leaped by 37 percent, sales of women's shoes declined by 11 percent.
By region, North America and Europe remained the two largest markets, respectively accounting for 47.1 percent and 29.7 percent of total revenues. This was followed by China (13.5%), Asia (7.6%) and other geographic regions (2.1%).
In response to the growing fashion athletic trend, Stella said that it is further diversifying its manufacturing base in Southeast Asia, with a new factory focused on this segment in Vietnam due to become operational in the second half of 2017.
In the first half, sales from the manufacturing division advanced by 4.0 percent to $717.5 million.
The retail business saw a return to positive same-store sales growth as a result of Stella's retail optimization strategy. Global revenues from the retail division increased by 13.0 percent to $45.1 million. In China, the retail business jumped by 17.6 percent to $35.3 million, with same-store sales up by 6.9 percent.
Last July 19, Stella completed the sale of its 60.0 percent stake in its China retail business. It continues to maintain control over its retail brands - Stella Luna, What For and JKJY by Stella - as well as its retail operations in Europe and other markets. As of June 30, the group has 205 Stella Luna stores and 115 What For stores worldwide.
Revenues from Stella's retail segment in Europe rose by 21.5 percent to $7.9 million, or by 24.4 percent on a currency-neutral basis. Same-store sales improved by 11.3 percent.
The group's gross and operating margins remained stable at 18.5 percent and 4.1 percent respectively. Net income rose by 11.5 percent to $33.9 million.
Looking ahead, the management said thae fashion athletic sector will remain a key growth area for its manufacturing business, although it expects that the current rate of growth in demand for this product segment will normalize in the second half of the year. It will invest further in its R&D capabilities to improve and extend its range of innovative footwear products, particularly in the fashion athletic segment. It will also focus on growing its fashion athletic footwear manufacturing capacity, particularly in Vietnam, in order to increase its competitiveness.
The company said it remains optimistic but cautious about the prospects for the second half of the year, due to external risks that may affect the confidence of its clients and consumers, such as terrorist attacks, tensions related to North Korea, protectionist rhetoric in the U.S. and the initiation of official Brexit negotiations.
