Early January 2024 numbers from Yue Yuen Industrial (Holdings) Limited, the manufacturer of footwear for most major outdoor and athletic brands, reflect a turnaround in the trend line for footwear manufacturing as the markets in the U.S. and Europe ramp up inventory after more than a year of de-stocking at retail.
The company reported that its footwear manufacturing segment revenue posted 12.5 percent growth in January 2024, the best year-over-year monthly performance since November 2022, which posted a 6.1 percent increase, while retail sales trends headed south.
Year-over-year footwear manufacturing comps were easier for January. Yue Yuen saw footwear manufacturing fall 25 percent in the year-ago January 2023 period.
The Pou Sheng segment, reflecting sales in the company’s China retail business, saw sales head in the other direction, contracting 25.8 percent in RMB terms to RMB 2.09 billion, compared to RMB 2.81 billion in January 2023; this could reflect widely reported effects of a slowing economy in China as the region struggles with real estate woes, a declining stock market and a slowing growth.
Yue Yuen’s consolidated revenues were down 9.1 percent in U.S. dollar terms to $736.5 million in January due entirely to the sharp decline at retail.
The company reported December 2023 revenues were down 2.4 percent, a clear improvement of declining trends for much of the year.
In the full-year period January through December 2023, sales were still down 12.0 percent to $7.89 billion, with a decline of 18.4 percent in the footwear manufacturing segment, more than offsetting a 7.7 percent gain to RMB 20.06 billion in the Pou Sheng retail business.
They say one month does not a trend make, but this should be seen as good news for the active lifestyle and street lifestyle footwear business.
Image courtesy Yue Yuen Industrial (Holdings) Limited
