Profit attributable to Yue Yuen (YY) shareholders declined by 52 percent to $83,601,000 from $175,049,000 for the six months ended June 30, as sales fell by 12 percent to $4,154,968,000 from $4,709,792,000. Ebit fell by 36 percent to $143,227,000 from $223,948,000.
The company cited a sluggish global macroeconomic environment and inventory destocking across the footwear industry for lowering the short-term performance of its manufacturing business.
Implied Q2 results show a 62 percent drop in profit attributable to shareholders to $32,757,000 and 11.6 percent decline in three-month revenues to $2,047,522,000 for the period ended June 30.
The globe’s largest producer of footwear cited declining six-month export figures from China (-6.3%), Vietnam (-16.8%) and Indonesia (26.9%) to confirm its statement on softening global demand for footwear. YY, which is seeing an increasing number of orders requesting shorter lead times of 30 to 45 days, has reduced its global workforce by 14 percent over the last 12 months to 276,800.
Within the manufacturing segment, H1 sales in all categories fell by double-digits year-over-year. Athletic/Outdoor style sales declined by 16.3 percent to $2,063.4 million; Casual/Sport Sandals dropped by 28.4 percent to $315.6 million; and Soles/Components/Other sales stepped 31.1 percent lower to $194.9 million for the six months. The volume of shipped shoes decreased by 23.8 percent to 109.8 million pairs, but the average selling price (ASP) rose by 7.5 percent to $21.67 a pair. YY attributed the improvement to robust demand for its high-end styles.
In FY22, YY shipped 272.7 million pairs of footwear, a 14.4 percent jump from the 238.3 million pairs shipped in FY21.
Meanwhile, the group’s Pou Sheng retail segment is continuing to make strides. H1 sales rose by 4 percent to $1,581.1 million as foot traffic at its retail stores and in shopping malls across China increased. Nonetheless, the unit is proceeding with its digital transformation, including its WeChat stores, Douyin live-streaming shopping events, and shopping mall membership platforms that collectively generated 50 percent H1 sales growth year-over-year.
