In a business update for the first quarter, Stella International said it recorded a fall in manufacturing revenues and shipment volumes, due to the delayed resumption of production at its factories in China after the Lunar New Year owing to the coronavirus outbreak.
The management also blamed seasonal orders pattern with more customers requiring shorter lead times compared to the same period last year. The Chinese shoe manufacturer’s revenues were down by 15.8 percent from the year-ago quarter to about $263.2 million.
First-quarter revenues from manufacturing operations decreased by 16.4 percent to $256.7 million, with shipment volumes down by 13.4 percent to 11.0 million pairs. The average selling price dropped by 3.7 percent to $23.3 per pair, which was mostly driven by changes in the group’s product mix and customer mix.
Looking ahead, the company said it will focus on implementing various defensive measures to safeguard operational stability, while improving its manufacturing efficiency and cost control. The management hopes this will restore capacity in a more advantageous and margin-accretive manner when demand normalizes. Stella will also continue to enact its long-term strategies, such as growing capacity in Southeast Asia.
Earlier this month, following Don Lee’s retirement, Stella appointed Andrew Tam as chief financial officer. Prior to joining, he was a member of the senior management for Li & Fung’s corporate finance