Stella International Holdings, Ltd., the Hong Kong-based developer, manufacturer and retailer of footwear and leather goods, reported that unaudited consolidated revenue for the three months ended September 30 fell approximately 15.9 percent to $387.2 million from $460.5 million in the year-ago period.
Shipment volumes in the third quarter decreased approximately 18.7 percent year-over-year to 12.2 million pairs, due to a shift in the focus of the customer mix and de-stocking by some customers to manage their inventory issues.
The company’s unaudited consolidated revenue decreased by approximately 14.3 percent to $1.10 billion in the nine-month year-to-date (YTD) period, compared to $1.29 billion in the corresponding YTD period last year.
Shipment volumes in the YTD period through September 30 decreased by approximately 18.8 percent year-over-year to 35.8 million pairs.
The average selling price was $30.8 per pair in the third quarter, up slightly from an ASP of $30.2 in Q3 last year. However, the YTD period saw a more pronounced gain thanks to the shift in strategy earlier in the year as ASPs rose to $30.0 per pair for the nine-month period, up from $28.6 per pair in the corresponding YTD period last year.
The increase in ASP during both periods was said to be mostly driven by changes to product mix and customer mix.
Stella said it remains confident of reaching the medium-term goals of its Three-Year Plan of achieving an operating margin of 10 percent and a low-teens annualized growth rate on profit after tax by the end of 2025.
“Our performance remains in line with our expectations, with the continued transition of our customer mix from the Casual to Luxury and high-end Fashion categories making year-on-year volume and revenue comparisons less pertinent. We expect the ASP for the full year of 2023 to remain elevated as customers request more premium products with higher production complexity.” Group CEO Chi Lo-Jen stated.
Group Chairman Lawrence Chen added, “The execution of our Three-Year Plan is proceeding as
anticipated and we are on track towards achieving our targets of expanding margins and profit after tax.”
Stella International, Ltd. works with sportswear and casual footwear brands, including Nike, Saucony, Under Armour, Merrell, Timberland, and UGG. The company also designs, develops and manufactures footwear for fashion brands Cole Haan, Kate Spade, Michael Kors, and Tory Burch, as well as high-fashion houses Balenciaga, Balmain, Chloé, Lanvin, Moncler, Off-White, Prada, and Stella McCartney.
