Although primarily dragged down by weak retail sales in mainland China following Covid-19 restrictions, the result represented an improvement from a 4% drop in the first quarter.

On the positive side, the company reported robust growth for its footwear manufacturing business, with revenue up 16% to US$2.91 billion. Average selling price increased by 9.7% to US$20.16 per pair, led by demand for high-end footwear.

Revenue for the group’s retail subsidiary, Pou Sheng, fell by 24.7% to US$1.52 billion, primarily down to poor foot traffic as a result of Covid-19 restrictions.

As of June 30, Pou Sheng had 4,455 directly operated retail outlets and 3,506 sub-distributors stores across the Greater China region, representing a net closure of 456 stores as compared with the 2021 year-end, in line with its current strategy.

Yue Yuen reported that gross profit for the first half of the year, impacted by the retail business, fell by 11.5% to US$1.095 billion.

Group Chairman Lu Chin Chu said: “The challenging economic environment and uncertainties will not change the course of our solid long-term strategy. We will continue to maintain our long-term growth and profit-accretive strategies for our manufacturing and retail businesses, with the long-term prognoses for both segments remaining bright.

“We will continue to closely monitor short-term risks associated with the global macroeconomy and the pandemic as we continue to position both businesses for recovery.”