Companies

Yue Yuen revenue up, but profits down

May 23, 2025 Hong Kong

The Hong Kong-based group saw revenue rise in the first quarter, but profits declined due to uneven production, lower efficiency and rising labour costs, as well as a volatile retail environment in Mainland China

In the first quarter of 2025, the company’s revenue reached 2.03 billion US dollars, reflecting an increase of 1.3% on a comparable basis to the same period of last year.

The footwear manufacturing business (including athletic/outdoor footwear, casual footwear and sports sandals) recorded sales growth of 7.8% year-on-year to 1.24 billion US dollars in the quarter, driven by a 5.3% increase in shipments to 61.9 million pairs at an average selling price of 20.04 US dollars, up by 2.5% - due to a high-quality order mix.

The group’s manufacturing business as a whole (including footwear, soles, components and others) recorded a revenue of 1.33 billion US dollars in the first quarter, an increase of 5.9%, as compared to the same quarter of 2024.

On the contrary, revenue attributable to the company’s subsidiary Pou Sheng decreased by 6.5% year-on-year to 701.2 million US dollars in the first quarter. This was the result of too volatile footfall in an increasingly dynamic retail environment in mainland China, despite the relatively resilient performance of its omnichannels.

In the first quarter of the current fiscal year, Ye Yuen’s gross profit decreased by 7.7%, as compared to the same period of last year, to 464.3 million US dollars, with the overall gross profit margin decreasing by 2.2 percentage points to 22.9%.

In particular, the manufacturing business recorded a 7.6% decline in gross profit to 234.7 million US dollars, with the margin falling by 2.6 points to 17.7%, mainly due to uneven production, lower efficiency and rising labour costs. Pou Sheng’s gross margin declined by 0.5 points to 32.7%, despite efforts to optimise inventory and sales, due to aggressive retail promotions.

Profits attributable to owners of Yue Yuen dropped by 24.2% to 75.8 million US dollars in the first quarter, on a comparable basis to the same quarter of the previous year. Excluding non-recurring items, recurring profit attributable to owners declined by 23.4% to 76.3 million US dollars.

Outlook

“Despite the strengthening global economic headwinds, the Group remains optimistic about the long-term prospects of the sports industry and confident in its role as a strategic supplier, sustaining demand from leading international brands”, said Yue Yuen in the statement.

Still, volatile sentiment due to global tariff and inflation challenges, weakened consumer confidence and recurring regional conflicts are disrupting shipping logistics. As a result, order visibility for the second half of 2025, particularly the traditionally slow third quarter, remains unclear, the group concluded.

Image Credits: Valentin Lacoste on Unsplash

Hong Kong Footwear Manufacturing Quarter Results Results Yue Yuen