Yue Yuen, which in mid-March warned of “gathering headwinds,” issued a Q1 profit warning late last week. The globe’s largest maker of footwear, citing a weak order book that impacted the operating efficiency of its manufacturing business, said net income is likely to decline by 40 to 45 percent to an implied range of $63.3 to $61.1 million for the period ended March 31. In Q1/22, the group reported a profit of $88.6 million. Yue Yuen’s Q1 manufacturing segment revenues, meanwhile, are forecast to decline by approximately 18 percent year-over-year to an implied $1.3 billion from $1.53 billion in the year-ago quarter.
The company, expected to formally report Q1 results next week, said current macroeconomic headwinds and high inventory levels across the footwear industry will continue to weigh on its order visibility and global demand for footwear in the near term. With that in mind, Yue Yuen is allocating its manufacturing capacity to balance demand, its order pipeline, and labor supply while simultaneously focusing on expense controls and cash flow management.
