Yue Yuen, the globe’s largest manufacturer of footwear, suffered a down year in 2023 due to inventory de-stocking by retailers worldwide and conservative ordering by its portfolio of brand clients that include Nike, Adidas, Asics and New Balance, among others.
Yue Yuen’s annual Ebit declined by 5.6 percent to $390.2 million as profit attributable to owners of the company fell by 7.0 percent year-over-year to $274.7 million from $296.3 million. Gross margin improved by 60 basis points to 24.4 percent from 23.8 percent, but all revenues tumbled by 12.0 percent to $7.89 billion from $8.97 billion in 2022. Manufacturing sales slipped by 18 percent to $5.06 billion, but the segment showed notable sequential improvement in both capacity utilization rate and margins last year. Meanwhile, annual retail sales from Yue Yuen’s Pou Sheng unit inched 2.3 percent higher to $2.83 billion. The volume of shoes shipped in 2023 decreased by 19.9 percent to 218.3 million pairs due to soft global demand, but the average selling price (ASP) inched up by 2.0 percent to $21.34 a pair.
All product segments had double-digit, year-over-year sales declines, led by a 24.5 percent drop in casual shoes/sport sandals to $616.4 million, followed by a 19.0 percent dip in soles and components to $402 million and a 17 percent decline in athletic/outdoor shoe sales to $4.04 billion. Regionally, the US, followed by Europe, had the largest year-over-year declines in annual sales. US revenues slid by 31 percent to $1.41 billion, while Europe’s FY sales contraction was nearly 23 percent to $1.29 billion. Greater China had a 1.6 percent increase in annual sales to $3.7 billion as sales to Other Asian countries rolled back 1.4 percent to $1.06 billion. Sales in all Other countries were down 20 percent for the year to $433.0 million.
