Stella International Holdings Ltd. reported that 2024 second quarter footwear manufacturing revenues inched up 0.7 percent to $422.5 million. The increase, while small, was the third consecutive quarter of positive growth for the Hong Kong-based developer, manufacturer and retailer of footwear and leather goods but also it represented a sharp deceleration from the 17.6 percent growth posted in the first quarter.
Stella International reports in U.S. dollar terms ($).
Shipment volumes for the three-month period increased by approximately 5.7 percent year-over-year to 14.8 million pairs, with growth said to be primarily driven by the Sports category.
Average selling prices (ASP) declined 5.0 percent to $28.70 per pair, compared to $30.20 per paid in the year-ago quarter, also due to the higher proportion of Sports category orders which have lower ASPs than the high-end Dress category.
“We are pleased to see the strong volume growth in the beginning of the year extend into the second quarter as we continue to see strong demand across all of our product categories, led by Sports,” offered Chi Lo-Jen, CEO, Stella International Holdings Ltd.
The company said the targets of its Three-Year Plan (2023-2025) are to achieve an operating margin of 10 percent and a low-teens compounded annualized growth rate (CAGR) on profit after tax by the end of 2025.
“Having achieved an operating profit margin of 10.7 percent in 2023, we are ahead of schedule in meeting the goals of our ThreeYear Plan (2023-2025), and we are confident that we will continue to meet these targets in the coming two years,” the company shared in a media release.
For the six-month year-to-date (H1)period, Stella said it expects to record a net profit of not less than $90.0 million as compared with a net profit of $55.2 million for the six months ended June 30, 2023. The Group’s unaudited consolidated H1 revenue increased by approximately 7.5 percent to $770.0 million from $716.0 million in H1 2023.
The increase in net profit was said to be primarily attributable to the 12.3 percent growth in shipment volumes driven by Sports category orders and earlier shipments to certain customers compared to the original shipment plan, an enhanced customer mix, and improved operating leverage resulting from the increased utilization of our Sports manufacturing facilities.
“We remain committed to achieving the margin and profitability targets set out in our Three-Year Plan,” said Lawrence Chen, chairman, Stella International Holdings Ltd. “Our confidence in achieving our full-year targets has grown amid improved order visibility and factory utilisation rates, particularly in our Sports segment.”
Image courtesy Stella International Holdings Ltd.
