Yue Yuen Industrial Holdings has reported a net profit of US$96.1 million for the first quarter ended March 31, up from $72 million in the year-ago period, but its operating earnings fell by 9.2 percent to $85.9 million before extraordinary items, reducing the operating margin of the group from 5.16 percent to 4.37 percent.
The gross margin declined to 22.28 percent from 22.86 percent in the year-ago period. Seasonal effects on production orders and adjustments in the allocation of production capacity adversely affected the gross profit of Yue Yuen's manufacturing on behalf of international performance brands. Conversely, the Pou Sheng subsidiary improved gross earnings by 28.6 percent to $179.2 million due to an improved mix of footwear and apparel products that allowed it to reduce sales promotions and inventory writeoffs.
Revenues went up by 7.3 percent to $1.97 billion, in spite of a 2.0 percent drop in the total manufacturing volume to 74.5 million pairs, as the group's retail turnover in Greater China jumped by 24.8 percent to $579.6 million.
In the manufacturing segment, sales of athletic shoes went up by 3.8 percent to $908.1 million, representing 46.2 percent of the total turnover, but casual/outdoor shoes were off by 6.8 percent to $305.7 million, and those of sports sandals declined by 8.4 percent to $31.3 million. Revenues from soles and components rose by 7.5 percent to $142.3 million.
