The world's largest shoe manufacturer reported a meager 0.3 percent increase in total revenues to $6.29 billion for the nine months to Sept. 30, with a drop of 10.6 percent in sales of casual and outdoor shoes offset by increases of 2.2 percent in athletic footwear and 5.9 percent in revenues from the group's wholesale and retail activities in Greater China.
While the share of revenues from athletic footwear increased to 47.8 percent of the total turnover, the share taken by casual and outdoor footwear declined to 14.6 percent. Sales of sports sandals increased by 2.0 percent to $66.8 million. Sales of soles, components and other items decreased by 8.7 percent to $454.3 million.
The total volume of shoes manufactured by the group rose by 2.1 percent to 236.1 million pairs, but total revenues from manufacturing declined by 1.1 percent because of a drop in average selling prices. However, the group's manufacturing operations for international brands delivered a 9.8 percent higher gross profit of $1,562.2 million, corresponding to a gross margin of 20.3 percent, thanks to more stable operations and a reduction in material costs that offset rising workers' wages.
Yue Yuen's wholesale and retail subsidiary, Pou Sheng International, raised its sales by 11.6 percent to 12.16 billion yuan renmimbi. Translated into U.S. dollars, this amounted to a 5.9 percent increase to $1.84 billion. Thanks to stronger retail demand and less discounting, Pou Sheng's gross profit increased by 16.6 percent to $660.3 million, with a rise of 22.8 percent in the local currency.
Across the group, the gross margin improved to 24.82 percent from 22.66 percent in the same nine-month period of 2015. Net earnings attributable to shareholders of the group went up by 32.6 percent to $378.8 million. Adjusted for a non-recurring financial gain and other items, adjusted net profit increased by 22.8 percent to $360.4 million.