Yue Yuen Nine-Month Revenue Falls 2.1%, Profit Down 51.9%

By Rebecca Stone

Profit at Yue Yuen Industrial (Holdings) Ltd. fell 51.9 percent to $134.0 million in the nine months ended Sept. 30. Group revenue for the same period slipped 2.1 percent to $5.89 billion, the company said Thursday.

The manufacturer makes athletic, casual and outdoor shoes. It also produces soles, uppers, bottoms and completed pairs for brand customers that include Adidas, New Balance, Nike, Salomon, Crocs and Timberland.

Shipment volume fell 5.8 percent to 178.5 million pairs. Average selling price rose 1.7 percent to $21.23 per pair. Price gains did not offset falling units.

What happened to order intake?

September showed positive signs for the Chinese shoemaker. They were not enough to improve order intake and shipments across the nine months.

• Total revenue: down 2.1 percent to $5.89 billion
• Manufacturing revenue, covering footwear production plus soles and components: down 3.8 percent
• Athletic and outdoor shoes: down 4.3 percent to $3.16 billion
• Casual shoes and sports sandals: down 3.4 percent to $625.8 million
• Soles, components and other manufacturing: up 1.8 percent to $280.6 million

Manufacturing supplies the bulk of the group, and it contracted faster than the consolidated line. Retail grew. The two together netted the reported 2.1 percent decline in group revenue.

Why did unit costs rise as volume fell?

Brand customers adopted a "more prudent approach to procurement," Yue Yuen said, and that shift drove increased order volatility. Demand for short lead-time orders rose with it.

Order pull-forward initiatives in the third quarter helped the company. They could not offset operating deleveraging from the reduced scale of the manufacturing business.

Overlapping long holidays in the group's three main production bases during the first half complicated production scheduling and resource allocation, reduced production efficiency and drove up footwear manufacturing unit costs. The company did not name the three bases in the release.

The margin damage follows from that arithmetic. A 51.9 percent profit decline against a 2.1 percent revenue decline means fixed costs and unit costs both moved against the group.

What does the retail arm show?

Pou Sheng, the group's Greater China retail subsidiary, posted revenue up 1.8 percent to $1.82 billion for the nine months. The chain sells shoes and apparel. It also collects commissions from concession sales.

What does the tariff backdrop mean for sourcing?

China's shoemakers have been under pressure since U.S. President Donald Trump imposed reciprocal tariffs in April 2025. The current tariff rate on most China imports hovers around 30 percent. Shoe brands have also moved production to countries such as Vietnam and Cambodia over the years. China is no longer the low-cost provider it once was, which narrows the margin room for brands that keep production there.

What does management expect next?

"Looking ahead to the fourth quarter, uncertainty remains the defining feature of the operating environment," Yue Yuen said in a statement. "With global sentiment fluctuating and supply-chain conditions yet to fully stabilize, order visibility remains relatively limited."

The company cited ongoing challenges in the global macroeconomy, including continued geopolitical tensions in the Middle East, Russia and Ukraine. It also flagged further weakening of consumer confidence, which clouds the "visibility of end-market demand and the outlook for the global footwear industry."

Yue Yuen says it will coordinate scheduling and pursue pull-forward opportunities to mitigate future production imbalances. Another overlap of long holidays in the group's three major production regions arrives in the first quarter of 2027.

For buyers placing orders with Yue Yuen, the practical question is lead time. The order book already shortened. The 2027 holiday calendar tightens it further.