Yue Yuen Industrial (Holdings) Limited reported first-quarter 2026 revenue of 1.99 billion USD, down 2.2% year on year, as weakening consumer sentiment and order volatility weighed on its manufacturing operations.

Gross profit fell 7.0% to 431.77 million USD, trimming the group gross margin by 1.2 percentage points to 21.7%. Manufacturing gross margin declined more sharply, slipping 2.9 percentage points to 14.8% on higher labour costs and production bottlenecks during overlapping Lunar New Year and Ramadan holidays.

Profit attributable to owners of the company dropped 53.6% to 35.18 million USD, reflecting lower operating profit and a reduced contribution from associates and joint ventures. Recurring profit, which excludes a 2.63 million USD fair-value loss on financial instruments, fell 50.6% to 37.74 million USD.

Key operating metrics and segment performance: • Footwear manufacturing revenue contracted 5.8% to 1.17 billion USD. Shipment volume slipped 8.1% to 56.9 million pairs, partly offset by a 2.4% rise in average selling price to 20.52 USD per pair. • Total manufacturing revenue, including soles and components, declined 5.5% to 1.26 billion USD. • Retail subsidiary Pou Sheng generated 730.00 million USD in revenue, up 4.1% in U.S.-dollar terms. Its gross margin improved 0.9 percentage points to 33.6% on tighter discount controls and inventory optimisation. • Selling and distribution plus administrative expenses fell 2.2% to 340.47 million USD, staying at 17.1% of revenue, while other expenses rose 15.0% to 44.45 million USD.

Finance costs eased 6.5% to 12.43 million USD, but the share of profits from associates and joint ventures fell to 11.33 million USD from 15.79 million USD a year earlier. Income tax expense decreased to 18.56 million USD from 27.30 million USD.

Management reiterated a cautious outlook, citing persistent geopolitical tensions, tariff uncertainties and inflationary pressures that could prolong demand volatility. The group will continue ramping up new capacity in Central Java and India, advance digital transformation and pursue cost controls to support profitability while monitoring raw-material supply risks and currency movements.