Yue Yuen’s gross profit increased 2.7% to US$2,513.1 million for the year ended December 31, 2019. Profit attributable to owners of the company declined 2.1% to US$300.5 million, compared with US$307.1 million in 2018. Revenue attributed to footwear manufacturing activity (including athletic shoes, casual/outdoor shoes and sports sandals) increased 3.1% to US$5,557.9 million. The volume of shoes shipped decreased 1.1% to 322.4 million pairs, while the average selling price per pair was up 4.3% to US$17.24 per pair, “due to the Group’s efforts to optimise customer and product portfolios”, read a statement. Total revenue in the manufacturing business (including footwear, soles and components) totalled US$6,000.6 million in 2019, up 2% year-on-year. Revenue attributable to Pou Sheng, the Group’s retail subsidiary, increased 14.9% to US$3,933.0 million.
Heading into 2020, Yue Yuen said the Group’s manufacturing and retail businesses are facing a more diverse range of challenges. “In addition to existing uncertainties already impacting the manufacturing business, particularly shifting international trade policies and rapidly changing consumer trends, the recent novel coronavirus (COVID-19) pandemic around the globe has significantly impacted the Group’s operations and will negatively impact its revenue and results in the first half of 2020”, said the Group in a statement, highlighting that its production facilities in China were shut down for several weeks during the coronavirus outbreak. While most of the Group’s facilities have resumed production, it will “take a period of time for the Group’s production bases to return to normal levels”.
Yue Yuen said it will continue to accelerate the pace of capacity migration to cost competitive regions as it responds to the addition of a 7.5% tariff (recently lowered from the original level of 15%) by the U.S. on footwear exported from China, the uncertain global environment and increasing demand for flexibility. “This includes shifting capacity from China to Southeast Asia, as well as shifting production facilities between Southeast Asian countries, while being mindful of the labour supply situation in the countries where the Group operates, especially in Vietnam”, said Yue Yuen, adding that the Group is actively monitoring the macroeconomic and geopolitical situation.
