The company attributed the drop to weak performance of its manufacturing business resulting from soft global demand for footwear amid an industry-wide inventory digestion cycle.

Profit attributable to the owners of the company totalled US$274.7 million, falling by 7.3% year-on-year. Profit attributable to the owners of the manufacturing business was down 19.7% to US$231.4 million.

Revenue from the footwear manufacturing business fell by 18.4% year-on-year to US$4.66 billion, while the volume of shoes shipped in 2023 was down 19.9% to 218.3 million pairs. This was partially offset by an increase in the average selling price of 2% to US$21.34 per pair.

Total revenue from the manufacturing business (including footwear and components) was down by 18.4% to US$5.06 billion.

Revenue attributed to the company’s retail subsidiary Pou Sheng saw growth of 2.3% in 2023 to US$2.83 billion. Pou Sheng had 3,523 directly operated retail outlets across the Greater China region at the end of the year, representing a closure of 570 stores.

Yue Yuen’s gross profit declined by 9.9% in 2023 to US$1.93 billion, with a margin up to 24.4%. Gross profit for the manufacturing business was down 15% to US$972.2 million.

Chairman Lu Chin Chu said: “In 2023, our manufacturing business demonstrated ongoing resilience by leveraging our core capabilities, with improvement in our gross profit margin and operating profit margin. I believe that with excellent operational foundations and convictions, the management team will together move forward with agility, amidst the new norm of an ever-changing macro environment, continuously safeguarding and boosting our sustainable growth.

“I am also pleased to share that we maintained a resilient ‘BBB’ MSCI ESG rating, received management level of CDP Climate Change and Water Security scores, as well as industry leading S&P Global ESG score, reflecting our efforts for sustainable manufacturing. We are fully committed to implementing our strategies to create value and deliver long term returns for our shareholders and stakeholders.”