Sporting footwear manufacturer Yue Yuen Industrial Holdings has reported lower revenue and sharply reduced profit in the first quarter of 2026, as volatile order demand, seasonal disruptions and higher labour costs weighed on manufacturing performance.
The group posted revenue of US$1.99 billion for the three months ending March 31, 2026, down 2.2% year-on-year, while profit attributable to shareholders fell 53.6% to US$35.2 million. Gross profit declined 7.0% to US$431.8 million, with overall gross margin narrowing to 21.7%.
Footwear manufacturing came under pressure, with revenue from footwear production declining 5.8% to US$1.17 billion as shipment volumes fell 8.1% to 56.9 million pairs. This was partially offset by a 2.4% increase in average selling price to US$20.52 per pair, reflecting a higher-value order mix. Total manufacturing revenue, including soles and components, decreased 5.5% to US$1.26 billion.
Manufacturing profitability also weakened, with gross margin in the segment falling 2.9 percentage points to 14.8%, which Yue Yuen attributed to short-term production inefficiencies caused by uneven order patterns and scheduling disruptions linked to the overlap of the Lunar New Year and Ramadan, alongside rising labour costs.
Meanwhile, retail subsidiary Pou Sheng delivered more resilient performance, with revenue rising 4.1% to US$730 million, supported by operational improvements, inventory management and stronger direct retail channel performance.
Looking ahead, Yue Yuen warned that reciprocal tariffs, inflation and macroeconomic uncertainty could continue to weigh on consumer demand and order visibility. The company said it would continue diversifying manufacturing capacity, including ramping up production in Indonesia and advancing a new factory in India, while strengthening cost controls and sourcing flexibility.
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