Companies

Tariff uncertainty and softer demand weigh on Yue Yuen’s first quarter

May 21, 2026 Hong Kong

The Hong Kong-based group has reported lower revenue and profits in the first quarter of 2026 due to tariff uncertainty, weaker consumer demand and production disruptions

According to the statement, Yue Yuen faced a more uncertain operating environment amid “an increasingly complex and dynamic global economic landscape”. Geopolitical tensions, tariff uncertainty and weaker consumer demand prompted brand customers to adopt a more cautious approach to ordering, which resulted in lower footwear shipment volumes and short-term volatility in order demand.

Production efficiency was further pressured by “seasonal misalignments” linked to holiday disruptions in mainland China, Vietnam and Indonesia, as well as by rising labour costs and ongoing capacity expansion in these countries.

First-Quarter Results

In the first quarter of the 2026 fiscal year, Yue Yuen reported a revenue of 1.99 billion US dollars, a 2.2% decrease compared to the same period of the previous year.

Revenue from footwear manufacturing (including athletic/outdoor shoes, casual shoes, and sports sandals) decreased by 5.8% year-on-year in the first quarter, totalling 1.17 billion US dollars. During the period, the volume of shoes shipped decreased by 8.1% to 56.9 million pairs, while the average selling price increased by 2.4% to 20.52 US dollars per pair, supported by adjustments in the product mix.

The group’s total revenue from the manufacturing business (including footwear, soles, components, etc.) was 1.23 billion US dollars, representing a 5.5% decrease compared to the first quarter of last year.

Meanwhile, revenue attributable to Pou Sheng increased by 4.1% year-on-year to 730.0 million dollars. However, revenue in the company’s reporting currency, the Chinese yuan, fell by 1.1% year-on-year, reflecting the impact of foreign exchange movements. The smaller decline in revenue was mainly driven by improved operational efficiency, tighter inventory management, and a resilient performance in direct retail channels.

In the three months to the 31^st of march, Yue Yuen’s gross profit declined by 7.0% to 431.8 million US dollars, compared to the same period of the 2025 fiscal year, with the overall gross profit margin contracting y 1.2 percentage points to 21.7%

As previously announced, the group’s profit attributable to owners fell during the period, with a year-on-year decline of 53.6% to 35.2 million US dollars. Excluding one-off items, the group’s recurring profit attributable to owners fell by 50.6% to 37.7 million US dollars.

Image Credits: Andrew Jephson on Unsplash

Hong Kong Companies Footwear Quarter Results Results Yue Yuen