Yue Yuen Industrial Holdings Ltd, one of the worlds largest manufacturers of athletic footwear, saw an increase in average selling prices help drive total revenues up 15.8% to $746.4 million for the fiscal first quarter ended December 31, compared to $644.7 million in the year-ago period. Net income declined 17.9% to $77.1 million, compared to $93.9 million in fiscal Q1 last year, a result aided by $23.4 million in upside from YYs divestment of Pou Chen shares last year. Ex the sale of shares in Q1 last year, net income would have risen 9.4% for the period.
YY said the revenue growth for Q1 was due primarily to ASP gains and steady sales growth in athletic shoe and casual/outdoor shoes. Total pairage was up 10.8% to 46.6 million pairs in the quarter. Despite the ASP gain, YY saw continued challenges in raw material pricing impact margins in Q1. Gross margin, which should have seen some upside from the increase in owned-retail sales, slipped 100 basis points to 23.5% of sales from 24.5% in the year-ago period.
The business shifted a little year-on-year, as athletic picked up just 30 basis points to 63.7% of total revenues. Casual/Outdoor shoes actually declined as a percentage of total revenues, losing 120 basis points of share to 16.1% of the total. Sole & Components also declined as a percentage, while Retail Sales rose more than 114% to contribute 3.6% of total revenues, compared to 1.9% of the total in Q1 last year.
