The company attributed this loss to a weakness in its manufacturing business resulting from softer global demand for footwear amid relatively high inventory levels across the industry.

Revenue attributable for footwear manufacturing in the three-month period ending March 31, 2023, totalled US$1.16 billion, falling by 16.8%.

The volume of footwear shipped during the quarter was down by 24% to 53.9 million pairs. Meanwhile, the average selling price was up by 9.6% to US$21.53 per pair.

Total manufacturing revenue (including footwear, soles, components and others) for the group was US$1.26 billion, a drop of 18.1% year-on-year.

Retail subsidiary Pou Sheng had revenue of US$852.4 million in the period, decreasing by 1.2% from the first quarter of 2022.

Yue Yuen reported that gross profit was down by 12.4% in the quarter to US$497.6 million, with the gross profit of the manufacturing business specifically falling by 19.4% to US$211.4 million. Profit attributable to owners of the company totalled US$50.8 million, a decrease of 42.6% year-on-year.

In a statement, Yue Yuen said: “The group remains optimistic about the long-term prospects of its manufacturing business. However, current macroeconomic headwinds and high inventory levels across the industry will continue to weigh on order visibility and global demand for footwear in the near term.

“The group will continue to proactively monitor the situation and dynamically allocate its manufacturing capacity to balance demand, its order pipeline and labour supply to control risk. It will sustain its efficiency and productivity, as well as the highest level of flexibility and agility, by leveraging its core strengths, adaptability and competitive edges to safeguard its profitability.”