World Footwear

Companies

Stella to continue re-allocating production

May 2, 2019 China
Stella to continue re-allocating production
The footwear giant announced the first results of the year. Revenue in the first quarter of the year was marked by a 6.1% increase compared to similar period last year
For the three months period ended on the 31st of March 2019, Stella announced unaudited consolidated revenue of approximately 312.6 million US dollars, representing an increase of roughly 6.1% as compared to the unaudited consolidated revenue of approximately 294.6 million US dollars for similar period last year.

Looking forward, the group continues to see stable volume growth for its fashion athletic footwear products, as well as steady demand for its casual and fashion footwear products. Average selling price for the rest of 2019 is expected to remain stable depending on the group’s product mix and its customers’ product mix. The group will continue to prioritise margin expansion, driven by increasing its production efficiency with further re-allocation of its production capacity from China to South East Asia and the ramp-up of its new manufacturing facility in Vietnam, as well as by enhancing its product mix.

Manufacturing Business

For the three months ended on the 31stof March (unaudited) revenue reached 307.1 million US dollars, corresponding to 12.7 million pairs, which resulted in an average selling price of 24.2 US dollars. Compared to similar period in 2018 this represents increases in all dimensions: 2.4% in volume, terms, 6.9% in revenue and 4.3% in terms of price. The increase in revenue was attributed to continued robust ordering activity for the group’s fashion athletic footwear products, higher ordering activity for its fashion footwear products and stable performance for its casual footwea  products. Global trade frictions did not have an impact on the group’s operations during the period under review. Stella confirmed it will continue to closely monitor potential risks in its operations arising from external events, particularly ongoing trade negotiations between the United States and China and uncertainties ahead of Brexit. The increase in ASP for the three months ended on the 31st of March 2019 was mostly driven by changes to the group’s product mix and customer mix.

Branding Business

The branding business is under consolidation and has been negatively affected by political circumstances in France during the first quarter of 2019, with two digits declines in revenue.

Financial Performance

Based on the company’s preliminary review of the management accounts of the group for the three months ended on the 31st of March 2019, the unaudited consolidated profit of Stella is expected to be  significantly higher as compared to that for the corresponding period in 2018 due to a low base effect. The increase in profit was  also  attributable to an increase  in  both  the  ASP  and shipment volume leading to a 6.9% increase in the revenue of the Group’s manufacturing business year-on-year; a much-enhanced  product mix  and  customer  mix; a moderate  year-on-year improvement in the production efficiency and ramp-up of its new manufacturing facility in Vietnam; and an improved cost structure resulting from the further re-allocation of its production capacity from China to South East Asia.

Photo by Amos Bar-Zeev on Unsplash

Related Events

  • May
    28
    May 28-May 31, 2019 | Guangzhou, China

    Shoes & Leather - Guangzhou

  • May
    28
    May 28-May 31, 2019 | Guangzhou, China

    Guangzhou China Shoes Fair

  • Jul
    5
    Jul 5-Jul 7, 2019 | Shangai, China

    ISPO Shanghai

  • Aug
    23
    Aug 23-Aug 25, 2019 | Wenzhou, China

    All China Shoe-Tech

Related Organizations

  • Museum of Shoes for Bound Feet

    Museum of Shoes for Bound Feet

    China
  • CLIA - China Leather Industry Association

    CLIA - China Leather Industry Association

    China
  • Wenzhou Shoe & Leather Industry Association

    Wenzhou Shoe & Leather Industry Association

    China