Yue Yuen Industrial (Holdings) Limited (Group) posted revenue of $8,031.4 million for full-year 2025, representing a decrease of 1.8 percent compared with the prior year.

The Group, its Manufacturing business, trade and report in U.S. dollar ($) currency. Yue Yuen’s Pou Sheng China Retail business trades and reports in the Chinese Renminbi (RMB) or Yuan currency.

Total Manufacturing business revenues, which includes footwear, as well as soles, components and others, was $5,648.3 million prior year for full-year 2025, representing an increase of 0.5 percent as compared to prior year.

Footwear Manufacturing revenue, which includes athletic/outdoor shoes, casual shoes and sports sandals, increased 2.5 percent year-over-year (y/y) to $5,296.6 million. The volume of shoes shipped during the year decreased slightly to 252.2 million pairs, reportedly due to “the more cautious procurement policies adopted by brand customers and a relatively high base.” Average selling prices (ASPs) rose more than expected, reaching $21.00 per pair, benefiting from a higher-quality order mix.

Pou Sheng China Retail business revenues decreased 7.0 percent to $2,383.1 million for full-year 2025, compared to $2,561.4 million in the prior year. In RMB terms, revenue decreased by 7.2 percent to RMB17,132.1 million, compared to RMB18,453.9 million in the prior year.

The company said the mainland China market faced “subdued consumer confidence and sustained weakness in foot traffic,” with elevated industry inventory levels leading to aggressive promotional activity. Sales in Pou Sheng’s retail stores and sub-distributor channels were said to have “declined substantially” compared with the prior year, partially offset by the continued resilient performance of Digital sales.

Yue Yuen said the performance of multiple e-commerce platforms was “satisfactory,” particularly in livestream sales which increased by over 70 percent y/y, reportedly driving up digital sales contribution to over 30 percent of Pou Sheng’s total revenue.

As of December 31, 2025, Pou Sheng had 3,310 directly operated retail stores across the Greater China region, representing a net closure of 138 stores as compared with the 2024 year-end. This aligns with the Group’s retail refinement strategy, under which it takes a holistic approach to planning its physical retail network, enabling it to focus on improving store-level efficiency and prudently developing new brands and sales channels.

Profitability & Expenses Summary
Group gross profit decreased 8.3 percent y/y to $1,827.8 million in 2025, with the overall gross profit margin decreasing by 1.6 percentage points to 22.8 percent of revenue.

  • Manufacturing business gross profit decreased 7.8 percent y/y to $1,030.0 million for the year, with the gross profit margin of the Manufacturing business decreasing by 1.7 percentage points to 18.2 percent of segment revenue as compared to the prior year. This decrease was attributed to uneven production leveling across various manufacturing plants, the production efficiency of some production lines that fell short of set targets, and higher labor costs and capacity ramp-ups, which together placed pressure on direct labor costs and production overheads for the year.
  • Pou Sheng Retail segment gross profit margin was 33.5 percent of segment revenue during 2025, a decrease of 70 basis points, reportedly due to aggressive promotions across the retail industry and increased average mark downs. This occurred despite Pou Sheng’s efforts to optimize its inventory mix.

The profit attributable to owners of the company was $381.1 million, a slight decrease of 2.9 percent as compared to $392.4 million recorded for the prior year. The profit attributable to owners of the manufacturing business increased by 3.7 percent to $362.7 million, while the profit attributable to owners of Pou Sheng decreased by 57.1 percent to RMB210.8 million due to a decline in sales.

The basic earnings per share was 23.76 cents, compared to 24.37 cents for the prior year.

The company reported that the Board has resolved to declare a final dividend of HK$0.90 per share (2024: HK$0.90 per share) for shareholders whose names appear on the register of members of the company on Monday, June 8, 2026. The final dividend shall be paid on Tuesday, June 23, 2026. Together with the interim dividend, the total dividend for the Year would be HK$1.30 per share (2024: HK$1.30 per share), representing the dividend payout ratio of 70 percent.

The Group’s commitment to upholding a relatively steady dividend level over the long-term remains intact.

Outlook
Despite mounting global economic headwinds, the Group said it remains optimistic about the long-term prospects of the sports industry. Yue Yuen said it will continue to solidify its role as a strategic supplier and strengthen its high-end footwear development capabilities, while deepening its enduring partnerships with leading international brands.

“Looking ahead to 2026, the operational environment remains unsettled,” the company said in its earnings release. “Reciprocal tariff-related challenges, inflation pressures and macroeconomic trajectory uncertainties may continue to weaken consumer momentum, while regional conflicts could also disrupt shipping logistics and the stability of raw material supply. Multiple factors may lead to volatile sentiment, with near-term order demand expected to continue fluctuating.”

The Group also said it expects seasonal scheduling challenges for production in the first quarter of 2026 arising from the overlap of the Lunar New Year and Ramadan. To mitigate the related impact, the Group has coordinated its order pacing as far as practicable, although this may still result in uneven production leveling and temporary inefficiencies due to production bottlenecks and demand volatility.

As it continues to closely monitor global economic and political developments, the Group said it remains committed to its mid- to long-term capacity allocation strategy. This includes diversifying its manufacturing capacity into regions such as Indonesia and India, where labor supply and infrastructure are supportive of sustainable growth.

The Group’s new manufacturing facility in Central Java, Indonesia, commenced operations in the third quarter of 2025, while the construction of its new factory in India is progressing in an orderly manner.

Going forward, the Group will flexibly adjust its ramp-up and production commencement plans in line with demand from its brand customers. To safeguard its production efficiency, the Group will continue to prioritize responsiveness as its core guiding principle and implement a comprehensive plan that includes disciplined workforce planning and capacity expansion schedules, thereby better balancing demand with its order pipeline and labor supply.

Image courtesy Yue Yuen Industrial (Holdings) Limited