Yue Yuen reported a 2.8 percent increase in first-half net income of $175.0 million versus $170.3 million for the six months ended June 30. Six-month revenues fell by 2.0 percent to $4,709,792,000 from $4,807,087,000, however, manufacturing segment sales were up by 14.4 percent to $3.19 billion. Ebit declined 17.7 percent to $223,948,000 from $272,057,000, as gross margin came in at 23.3 percent versus 25.8 percent in the year-ago period. The globe’s largest manufacturer of footwear said period profitability was negatively impacted by its Pou Sheng retail subsidiary. Profit attributable to owners of Pou Sheng, whose six-month revenues were down by 24.7 percent to $1.52 billion, fell by 97 percent to RMB 17.4 million (€2.5m).
Implied Q2 results for YY reflect flat revenues of $2,315,423,000 versus $2,313,815,000 for the three months ended June 30, but a 27 percent increase in net income to $77.9 million from $61.4 million.
During H1, YY saw its average selling price (ASP) for footwear rise by 9.7 percent to a historical high of $20.16 a pair, led by strong demand for its high-end styles and its “ongoing premiumization efforts.” Group H1 sales of athletic/outdoor shoe sales rose 18.4 percent to $2,465.2 million. Elsewhere, casual shoes/sport sandal sales rose 3.9 percent in H1 to $440.7 million, and revenues from soles/components/other inched up 0.7 percent to $283.0 million.
While cautiously optimistic about the resilience of its manufacturing business, the group said concerns about global demand “overshadow order visibility and have the potential to hamper the stability” of the segment and its H2 order book. YY intends to continue diversifying its manufacturing capacity in Southeast Asia, particularly in Indonesia, where it says labor supply and infrastructure will support viable growth. Additionally, the group, recently recognized by the Financial Times and Statista as a “Climate Leader in Asia-Pacific,” intends to strengthen its focus on sustainability, ethical conduct and corporate values.
