China situation hurts Yue Yuen in Q1 but optimism remains
Specialist outsource athletic footwear manufacturing group Yue Yuen has reported revenues of $2.4 billion for the first quarter of 2022, a decline of 4% compared to the same three months last year.
The total comprises its revenues from its main business, making athletic shoes for partner brands, as well as its production of casual shoes and of soles and footwear components. It also includes sales revenues from the group’s retail subsidiary in China, Pou Sheng.
Sports and outdoor shoe production accounted for almost 50% of total Yue Yuen revenues during the quarter, while Pou Sheng contributed 36% of the total.
In the first quarter of 2022, Pou Sheng’s revenues were $862.5 million, a decline of 23.5% compared to the same quarter in 2021. Yue Yuen said Pou Sheng’s “weak sales” were the main reason for the decline in its overall revenues.
Its athletic shoe production increased by 16.2% year on year to reach almost $1.2 billion. There was also an increase in the volume of the shoes it shipped in the three-month period, rising by 3.8% year on year to 70.9 million pairs.
Yue Yuen said short-term risks to its manufacturing business remain, particularly those posed by covid-19 in mainland China, as well as from labour supply constraints in certain south-east Asian countries. But it said it was cautiously optimistic about the continued growth of its manufacturing business, with global demand for its footwear “remaining solid” and a good order pipeline.
