Solid recovery in the group’s financial results was offset by disruption to its manufacturing operations in Vietnam. According to a statement from Lu Chi Yuan, Director of the groups’ retail subsidiary Pou Chen, reported by Reuters, about 6% of total employees have quit and the business is facing labour shortages, delays in large orders, and production and export disruption.
During the first nine months of the year, revenue attributed to Pou Chen in RMB terms (the company’s reporting currency) decreased by 1.7% to RMB18 billion (US$2.8 billion).
The volume of shoes shipped by the group as a whole during the period was 179 million pairs, while the average selling price increased by 3.1% to US$18.43 per pair, as compared with the same period in the prior financial year.
In the first nine months of 2021, the group’s total revenue for its manufacturing business was US$3.7 billion, representing an increase of 5.4% year-on-year. Gross profit for the group as a whole increased by 24.2% to US$1.6 billion, while the gross profit margin increased by 3.6 percentage points to 24.2%. Gross profit for the manufacturing business increased by 20.2% to US$560.5 million while the gross profit margin expanded by 1.8 percentage points to 15.3%.
Going forward, as manufacturing operations in Vietnam resume, Yue Yuen plans to continue to streamline its cost structure by aiming to return to the higher order fill rate and more balanced capacity utilisation seen earlier in the year, so as to restore operational efficiency.
As it heads into its peak season in the fourth quarter, the group will closely monitor the pandemic situation in its key manufacturing regions while dynamically allocating its manufacturing capacity, where needed, to balance demand, its order pipeline and labour supply.