Business Daily Media

Men's Weekly

.

Stella Well Ahead of Schedule in Meeting Growth and Margin Expansion Targets in 2023

Well-Positioned to Capture Opportunities with Strong Net Cash Position

Highlights:

  • Well ahead of schedule in meeting operating margin and profit after tax CAGR target levels set out under our Three-Year Plan (2023 – 2025)
  • Average selling price ("ASP) increased by 4.2%
  • Further enhancement of customer portfolio, led by Luxury and high-end Fashion categories
  • Rationalisation of the Group's retail operation in Mainland China and exited all other physical points-of-sales worldwide
  • Gross profit margin expanded by 3.0 percentage points to 24.6%
  • Operating profit US$159.4m saw an increase of 18.2% year-on-year
  • Operating profit margin increased to 10.7% from 8.3% last year
  • Adjusted net profit increased by 23.5% to US$147.6 million
  • Strong net cash position of US$287.4 million (2022: US$206.1 million).
    About US$140.0 million is earmarked for delayed capacity expansion in Bangladesh and Indonesia
  • Declared final dividend of HK61 cents per share, representing a full-year dividend of HK103 cents per share (70% payout ratio based on adjusted net profit)

HONG KONG SAR - Media OutReach Newswire - 21 March 2024 - Stella International Holdings Limited ("Stella" or the "Group"; SEHK: 1836), a leading developer, manufacturer and retailer of quality footwear and leather goods products, today announced its annual results for the year ended 31 December 2023.

In 2023, we were well ahead of schedule in reaching the growth targets set out under our Three-Year Plan (2023-2025), namely achieving an operating margin of 10% and a low-teens annualised growth rate on profit after tax by the end of 2025.

ASP and Margin Expansion driven by Much-Enhanced Customer and Product Mix

A much-enhanced customer and product mix, driven by customers in our Luxury and high-end Fashion categories introducing new premium products, offset the impact of destocking by some Sports customers and contributed to the 300 basic point increase in our gross profit margin. Our average selling price ("ASP") increased, even as revenue and volume declined as expected. At the same time, our relentless focus on improving our operational efficiency, while maintaining tight cost controls, steadily enhanced our operating margin which expanded to 10.7% compared to 8.3% in 2022.

Due to the factors outlined above, the Group recorded a net profit of US$140.3 million. Excluding a net fair value change from its investment in Lanvin Group, the Group recorded an adjusted net profit of US$147.6 million (2022: US$119.5 million). Our adjusted net profit margin was 9.9% (2022: 7.3%).

Maintained Normal Payout Ratio of about 70%

After considering the Group's free cash flow situation, the Board has resolved to declare a final dividend of HK61 cents per ordinary share, representing a full-year dividend of HK103 cents per ordinary share for the year ended 31 December 2023, and maintaining our normal payout ratio of about 70% set against our adjusted net profit.

Outlook: Optimistic about Continued Margin Expansion with Further Enhancement of Customer and Product Mix and Improving Production Efficiency under the Three-Year Plan

We expect to maintain our strong gross profit margin and operating margin levels in 2024 and to continue meeting the targets set out in the Three-Year Plan.

We expect our non-Sports manufacturing facilities to continue operating at close to full utilisation as we further enhance our product category mix as part of our Three-Year Plan. As such, we plan to transition more production from our factories in Vietnam to the factory we are ramping up in Solo, Indonesia, including the production of some Fashion products, as workers' skills improve. We also expect our Sports order book to improve in 2024.

Push Forward Capacity Expansion in Indonesia and Bangladesh

As we become more confident about our outlook, we plan to push forward our long-term capacity expansion projects. This includes the start of building a new manufacturing facility in Indonesia for our major Sports customer, and further progressing the buildout of an additional production facility in Bangladesh that we are already undertaking.

Mr. Chi Lo-Jen, Chief Executive Officer of the Group said, "We are optimistic about continued margin expansion as we enhance our customer and product mix, increase our production efficiency, and further strengthen our operational management through digitalisation and other measures under our Three-Year Plan. Even with the global retail environment remaining subdued, we remain firmly on the path to delivering improved profit and strong performance."

Mr. Lawrence Chen, Chairman of the Group, said, "We will continue to cultivate our relationships with new customers in the Luxury and high-end Fashion categories, which are seeking to expand or add premium lifestyle and athleisure footwear into their collections, to enhance our product mix and provide increasing returns for our shareholders."
Hashtag: #Stella

The issuer is solely responsible for the content of this announcement.

About Stella International Holdings Limited

Stella International (SEHK: 1836) is a leading developer and manufacturer of quality footwear and leather goods. A trusted partner to many of the world's most sought-after brands, it offers a unique proposition of unparalleled craftsmanship, production flexibility, and strong speed-to-market and commercialization capability, supported by a broad, diverse and proven manufacturing base across China and Southeast Asia.

Stella International was listed on the Hong Kong Stock Exchange in 2007 and is a constituent of the MSCI Hong Kong Small Cap Index.

News from Asia

Rhenus 4PL Solutions Brings Digital Logistics Expertise Support To The Circular Economy Initiative Of Looper Textile Co. And REMONDIS

Circular textiles at industrial scale: Looper Textile Co. collects, sorts and processes up to 150 million garments annually for reuse and recycling. Digital coordination by Rhenus...

ISCA and SHICPA Sign MOU to Strengthen Support for Accountancy Professionals and Firms in Shanghai

SINGAPORE - Media OutReach Newswire - 8 July 2025 - The Institute of Singapore Chartered Accountants (ISCA) and the Shanghai Institute of Certified Public Accountants (SHICPA) have signed a Memora...

Proscenic Launches Major Prime Day 2025 Sale with Up to 40% Off Best-Selling Vacuums Starting at €89

SHENZHEN, CHINA - Media OutReach Newswire - 8 July 2025 - Smart home innovator Proscenic is kicking off Prime Day 2025 with one of its biggest sales yet, offering up to 40% off its top-rated vacuu...

Arrow Electronics Launches Engineering Solutions Center to Support Tech Innovation Across India and Southeast Asia

BANGALORE, INDIA - Media OutReach Newswire - 9 July 2025 - Arrow Electronics, a global provider of technology solutions, today announced the launch of its new Engineering Solutions Center(ESC) in ...

XIXILI Introduces Jelly Padded Bras: A Game-Changer in Everyday Comfort

KUALA LUMPUR, MALAYSIA - Media OutReach Newswire - 9 July 2025 - Renowned for empowering women through inclusivity and thoughtful design, XIXILI announces the arrival of its latest bra collection:...

Jurassic World: The Experience Roars Into Bangkok - 8 August 2025 At Asiatique The Riverfront Destination

BANGKOK, THAILAND - Media OutReach Newswire - 9 July 2025 - Asset World Corporation (AWC), Thailand's leading integrated lifestyle real estate group, together with NEON and Universal Destinations ...

Health2Sync and Novo Nordisk Pharma Korea, Ltd. Launch Smart Cap Mallya® for FlexTouch® Insulin Pens Integration in South Korea, Enhancing insulin administration via Digital Diabetes Care

SEOUL, SOUTH KOREA - Media OutReach Newswire - 9 July 2025 - Health2Sync, Asia's leading digital chronic disease management platform, announced the successful integration of Smart Cap Mallya® for ...

E-commerce Platform Wildberries Pilots Its Own Taxi Service

MINSK, BELARUS - Media OutReach Newswire - 9 July 2025 - Wildberries, a leading e-commerce platform in Eurasia, has begun testing its own ride-hailing service in Belarus. The company expects the n...

DYXnet Awarded ISO/IEC 42001 AI Management System Certification by SGS

Leading the New Era of AI in Hong Kong's Telecommunications Industry HONG KONG SAR - Media OutReach Newswire - 9 July 2025 - DYXnet, a wholly-owned subsidiary of VNET Group, Inc...

Prince Foundation Extends Support for Children’s Healthcare in Cambodia Through Cambodia Kantha Bopha Foundation, Reflecting Commitment Guided by Neak Oknha Chen Zhi

PHNOM PENH, CAMBODIA - Media OutReach Newswire - 9 July 2025 - Prince Foundation, the philanthropic arm of Prince Holding Group under the leadership of Neak Oknha Chen Zhi, has reaffirmed its ong...

How to ensure your manufacturing business survives international tariff turmoil

Optimising your operations in FY2026 will help you combat the challenges of a volatile trading environment. Up, down, in out…Since the commence...

Why Apptio is Enhancing Visibility into AI and Hybrid Cloud

AI investments have become a strategic priority for business with the mindset that if you're not using AI, you're falling behind. But according to...

Beyond borders: Building a scalable strategy for international hiring

For many Australian businesses, growth increasingly depends on thinking beyond local borders.  As wage pressures rise, and specialised talent pool...

The Next Generation of Maritime Sustainable Solutions

As organizations globally seek innovative ways to improve sustainability and their impact on Earth, the American Waterways Operators (AWO), a lead...

Demand for Home Batteries surges as Federal Rebate Kicks In

A leading provider of energy solutions VoltX Energy has seen a 400% increase in demand for home batteries in the past three weeks as people put d...

Why Sport Remains the Safest Bet in an Uncertain World

When Rome was in crisis, its leaders did not retreat to the Senate. They went to the circus. To the chariot races. To the gladiators. Sport was no...

Sell by LayBy