Yue Yuen Industrial Ltd, which manufactures footwear for many major athletic brands, saw its biggest growth come in its casual/outdoor footwear and sports sandals categories in its second quarter ended March 31. Overall Q2 revenues rose 11.9% to $944.5 million while net profit slipped 2.5% to $80.1 million from $82.2 million. Gross margins eroded to 23.2% from 23.7%.
Athletic footwear manufacturing revenues climbed 9.5% to $543.3 million, but declined to 57.5% of the total business versus 58.8% in Q2 last year. Casual and Outdoor footwear advanced 15.6% to $164.3 million and increased its share of the total business to 17.4% from 16.8%. Sport Sandals revenues catapulted 65.3% to $23.8 million. Components revenues declined 9% to $98 million; owned-retail advanced 46.8% to $107 million.
Growth in exports to the U.S. grew 4.8% to $345.8, but lagged all other regions. The region with the most growth was South America, gaining 36.6% to $26.5 million, followed by Asia, up 21.4% to $322.2 million; Europe 9.3% to $212.2 million; and Canada, 7.2% to $14.9 million.
In the first two months of Q307 (April and May), sales increased 6.6% to $713.8 million, an increase of 6.6% year-on-year. For the remainder of the year, Yue Yuen expects sales growth for the footwear and China retail operations to remain on track.