Net profit was down nearly 25 percent at $83.5 million, and gross profit slipped by 220 basis points to 22.9 percent from 25.1 percent in the year-ago period.
Yue Yuen’s Ebit fell by 23.7 percent to $110.8 million from $145.1 million in the period ended March 31. Net profit was down nearly 25 percent at $83.5 million, and gross profit slipped by 220 basis points to 22.9 percent from 25.1 percent in the year-ago period. Revenues inched up by 1.3 percent to nearly $2.030 billion from $2.003 billion.
The world’s largest manufacturer of footwear cited uneven production leveling, production efficiency that fell below targets, and higher wages for negatively impacting the profitability of its manufacturing business in Q1. The group did report “significantly higher than average” order fulfillment and capacity utilization at certain factories.
Shoe volume stepped up 5.3 percent in Q1 to 61.9 million pairs as the Average Selling Price (ASP) increased by 2.5 percent year-over-year to $20.04 per pair due to higher orders of premium styles. By region, China produced 10 percent of Q1 units, down from 11 percent in Q1/24 and 34% in Q1/23. Indonesia’s production declined to 55 percent of the total from 56 percent in the year-ago period, and production from Vietnam rose to 31 percent from 29% last year.
Sales of YY’s largest footwear segment, athletic/outdoor shoes, rose by 3.8 percent year-over-year to $1,033.6 million to account 50.9 percent of all manufacturing volume. Meanwhile, the casual shoe/sport sandal segment had a 34 percent year-over-year increase in sales to $205.9 million. Sales of Soles/Components/Other fell by 14.9 percent to $88.8 million.
The group’s retail division, Pou Sheng, suffered a 16.6 percent drop in Q1 operating profit to 231-million-yuan renminbi (€28.4m). Net profit attributable to the owners was essentially flat at RMB149 million (€18.2m) as revenues declined by 5.4 percent to RMB5,107 million (€627.3m). YY reported a 13.9 percent decline in same-store sales growth, but ASPs were stable.
