HONG KONG (dpa-AFX) - Shares of Yue Yuen Industrial (Holdings) Limited (YUEIF, 0551.HK) gained around 3 percent in the Hong Kong trading after the footwear manufacturer reported higher manufacturing business revenues, shoe volume and selling price in the first nine months of fiscal 2025, even though profit and total revenues were weak.
Looking ahead for the fourth quarter, which is traditional peak season for the manufacturing business, the company projects shipment volumes to increase quarter-on-quarter.
The company said it expects the near-term business environment to remain unsettled, with volatile sentiment potentially arising from reciprocal tariff-related challenges, inflation, and weakened consumer confidence due to macroeconomic uncertainties. The firm also projects further disruptions to shipping logistics and stability of raw material supply due to regional conflicts.
In the nine-month period, profit attributable to owners of the company fell 16 percent to $278.72 million from $331.66 million a year ago.
Recurring profit attributable was $262.0 million, compared to $305.2 million last year.
The company noted that profit margins and earnings for the manufacturing business continued to improve quarter-on-quarter in the third quarter.
Gross profit margin fell to 22.8 percent from 24.2 percent a year ago. Gross profit margin of the manufacturing business dropped 1.3 percentage points to 18.3 percent, mainly due to uneven production leveling across various manufacturing plants, among others.
Revenue dropped 1 percent to $6.017 billion from $6.075 billion a year earlier, mainly due to 7.9 percent decline in Pou Sheng revenue from last year to $1.79 billion. In Pou Sheng's reporting currency of RMB, revenue decreased 7.7 percent to RMB12.90 billion.
According to the firm, the decline was mostly attributable to volatile foot traffic across regions amid an increasingly dynamic retail environment in mainland China, including a substantial decline in its offline direct retail and sub-distributors channels, despite the relatively resilient performance of its omni-channels.
However, total revenue with respect to the manufacturing business, including footwear, as well as soles, components and others, was $4.23 billion, representing an increase of 2.3 percent from last year.
The revenue attributable to footwear manufacturing activity, including athletic/outdoor shoes, casual shoes and sports sandals, increased 4.6 percent year-over-year to $3.96 billion.
Shoes shipment volume grew 1.3 percent to 189.4 million pairs, and average selling price or ASP increased 3.2 percent to $20.88 per pair, attributable to a higher-quality order mix.
In Hong Kong, YUE YUEN shares closed Friday's regular trading at HK$15.570, up 2.84 percent.
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