Yue Yuen, the world's largest manufacturer of athletic shoes, reported sales accelerated 7.3 percent in the first quarter ended Mar. 31, to $1.97 billion.
By category, athletic shoes grew 3.8 percent to $908.1 million although the biggest gain for the Chinese company came from retail, ahead 24.8 percent to $579.6 million. Soles, components & others sales were up 7.5 percent to $142.3 million.
Declining categories included casual/outdoor shoes, down 6.8 percent to $305.7 million. Sports sandals revenues were down 8.4 percent to $31.3 million. Total shoes manufacturing volume was down 2.0 percent to 74.5 million pairs for the quarter.
Net profits rose 28.4 percent to $90.1 million although comparisons were impacted due to losses in the year-ago period on derivatives. In the latest period, derivative financial instruments showed a gain of $4.8 million versus a loss of $24.2 million in the year-ago period. Excluding non-recurring items, operating profit declined 9.2 percent in the quarter to $85.9 million.
Gross margins eroded slightly to 22.3 percent from 22.9 percent, impacted by seasonal effects on product orders and adjustment on allocation of product capacity involving its international performance. SG&A expenses rose to 17.0 percent of sales versus 16.3 percent a year ago.