Stella Intl. recorded a 53 percent increase in adjusted net profit to $92.9 million from $60.3 million in H1 ended June 30, improving its adjusted net profit margin to 12.1 percent from 8.4 percent.
The Chinese group, which intends to return up to $180 million to shareholders by 2026 through share repurchases and special dividends, received an H1 lift from the sports category. Revenues rose by 7.5 percent to $770.0 million, and shipments increased by 12.3 percent, both gains driven by the sports segment. However, average selling prices (ASPs) fell by an unspecified percentage year-over-year due to the higher percentage of lower-priced sports offerings. Gross margin grew by 270 basis points to 25.8 percent.
The maker of footwear and leather goods believes its non-sports manufacturing operations will operate close to capacity in H2, and shipment volumes will grow moderately thanks to the sports category.
Stella remains committed to its three-year strategy to achieve an operating margin of 10 percent and a low teen annualized growth rate on net profits by the end of 2025.
“We are prioritizing the ramp-up of our new factory in Solo, Indonesia, and improving worker skill levels to expand our capacity for higher-margin products and transition the production of some fashion category products there from our factories in Vietnam,” commented Stella’s CEO Chi Lo-Jen.
