The company, which also has its own tannery operations, achieved consolidated revenue of US$343.3 million for the fourth quarter of 2022, a drop of 15.4% year-on-year.

The company attributed this to a high base effect with its manufacturing business running at a full utilisation rate during the same period of last year despite the high level of Covid infections in southern Vietnam.

For the twelve months ended December 31 2022, the Group’s unaudited consolidated revenue increased by approximately 5.9% to US$1,631.0 million.

Shipment volume for the fourth quarter totalled 11.9 million pairs, down from 14.4 million pairs in the same period of 2021. For the full year, the volume totalled 56 million pairs, up from 55.8 million pairs in 2021.

The company’s average selling price (ASP) increased to US$28.2/pair in the fourth quarter of 2022 from US$27.5 in the fourth quarter of 2021. The ASP for the full 2022 fiscal year was US$28.5/pair, up from US$27.1 in 2021.

Stella noted that this increase in ASP was driven by changes to its product mix and customer mix, as well as higher raw material costs, better production efficiency and cost controls.

Looking forward, the company noted that the rapidly changing macroeconomic and geopolitical environment is continuing to cloud its order book visibility and predicted that the increase in Covid infections in China may also temporarily impact the utilisation of its manufacturing facilities in the country although the impact will be partially offset by the company’s geographically diverse production base and early Lunar New Year holiday.

Stella also forecasts facing tougher revenue and shipment volume comparisons in the first half of 2023 as its manufacturing business was operating at a full utilisation rate in the first half of 2022. The company is committed to its major long-term capacity expansion projects, with the ramp-up of a new manufacturing facility in Solo, Indonesia, remaining on track.

Chi Lo-Jen, Chief Executive Officer of the Group, said: “Looking ahead, external headwinds remain, including economic slowdowns in North America and Europe and the Covid situation in China. However, our margin-accretive strategic initiatives continue, supporting ongoing margin expansion and our long-term profitability despite the slowdown in top-line growth momentum in the final quarter.”