The Hong Kong-based shoe manufacturer and retailer Stella International has reported a 27.5 percent year-over-year increase in third-quarter revenues to $439.3 million. The period marked a slowdown from the company’s recovery in the first half, due to a tougher comparative basis. In the first nine months of the year, the top line grew by 32.6 percent to $1,135 million.
Manufacturing revenues rose by 28.2 percent to $431.6 million during the quarter and by 32.6 percent to $1,115 million in the nine-month period, thanks to higher orders, particularly in the luxury, fashion and sports categories.
Shipments rose by 21.7 percent to 14.9 million pairs in the quarter and by 27.0 percent to 41.4 million pairs in the nine months. A shift in the mix of products and clients led the aaverage selling price to improve to $28.90 a pair in the quarter, up from $27.50 a year earlier, and to $27.00 a pair in the nine months, up from $25.80.
Stella noted that its factories in Vietnam were not affected by Covid-19 restrictions during the third quarter, being located in the north of the country. The company’s new factory in Indonesia is expected to go on stream by the end of the year. Stella said it was cautiously optimistic, but warned about the risks stemming from new Covid outbreaks and the power shortages in China.
Vietnam footwear production was badly affected by Covid-19 related lockdowns, especially in the Ho Chi Minh City region, where about 80 shoe factories remained closed for a couple of months. According to the Vietnamese leather, footwear and leathergoods industry association, Lefaso, the country’s footwear exports dropped by 44.2 percent in September.
Stella is “cautiously optimistic” for the remainder of 2021. It noted that the Covid-19 situation in Southeast Asia remains a “key uncertainty” and that it will closely monitor the potential impact of recently announced electricity controls in China. The company continues to prioritize margin improvement.
The chairman, Lawrence Chen, noted that the company’s new factory in Solo, Indonesia, is in the “midst of commencing operations” and is expected to contribute to sales in 2022.
