The group posted revenue of US$3.97 billion for the six months ending June 30, 2026, down 2.2% year-on-year, while profit attributable to shareholders fell 57.9% to US$72 million. Gross profit declined 10.3% to US$823.6 million, with the overall gross margin narrowing to 20.7% from 22.6%.
Footwear manufacturing remained under pressure, with revenue declining 4.8% to US$2.49 billion. Shoe shipment volumes fell 6.4% to 118.6 million pairs, partially offset by a 1.6% increase in average selling price to US$20.95 per pair. Total manufacturing revenue, including soles, components and other products, decreased 4.7% to US$2.67 billion.
Manufacturing profitability weakened significantly, with gross profit falling 23.3% to US$380.3 million and gross margin to 14.3%. Yue Yuen attributed the deterioration to operating deleverage from the contraction in sales, uneven production levels caused by volatile short-term order demand, and increased labour and overhead costs.
Meanwhile, retail subsidiary Pou Sheng delivered more resilient performance. Revenue increased 3.5% to US$1.31 billion, while its gross margin improved to 33.9%. Its profit attributable to owners increased 29.9% to RMB243.7 million (US$ 36.15 million). Pou Sheng had 3,110 directly operated stores across Greater China at the end of June, 200 fewer than at the end of 2025, as it continued to focus on store-level efficiency.
Looking ahead, Yue Yuen expects the operating environment to remain unsettled in the second half of 2026, with inflation and macroeconomic uncertainty likely to weigh on consumer momentum and near-term order visibility. The group will continue diversifying its manufacturing base in Indonesia and India, while adjusting production ramp-up plans to demand and strengthening cost controls.
