Feng Tay Enterprises Co (豐泰企業), which supplies about a sixth of Nike’s footwear, this week reported record-high revenue of NT$14.21 billion (US$439.3 million) for last quarter, up 15.17 percent year-on-year, driven by growing orders from the world’s largest sportswear brand and increased contribution from its overseas factories.
“The sales performance last quarter was broadly in line with our expectations,” spokeswoman Amy Chen (陳麗琴) said by telephone yesterday, adding that footwear sales in the first quarter increased 7.6 percent from a year earlier to 22.19 million pairs.
Specifically, the company’s shoe sales increased 11.1 percent year-on-year to 7.45 million pairs last month, boosting its consolidated revenue by 17.16 percent to NT$4.88 billion, Chen said.
The higher revenue helped lift net income by 9.11 percent year-on-year to NT$914.35 million in the first quarter, despite some foreign-exchange losses.
Earnings per share were NT$1.53 in the first quarter, compared with NT$1.45 in the same period the previous year, company data showed.
Established in 1971, the Douliou City (斗六), Yunlin County-based company has been making diversification efforts in its customer base and product portfolio, aiming to generate more revenue by enhancing profitability. To bring down its production costs, Feng Tay shifted its production to Southeast Asian nations years before its competitors.
Feng Tay operates several production bases in Vietnam, India, China and Indonesia. Its production capacity in Vietnam and India accounted for 53 percent and 20 percent of the company’s total capacity respectively last month, company data showed.
The company said its Indonesian business, which added two more plants late last year, is to continue fulfilling Nike orders this year, while its three plants in India are to increase their production lines this year to fulfill increasing leisure footwear orders from other brands, such as Salomon and Converse.
The company entered into a strategic partnership with Nike in 1979.
In Vietnam, one plant run by Feng Tay’s Vietnamese subsidiary Dona Standard Footwear Co producing Nike shoes and two plants of its Vietnamese subsidiary Shoe Majesty Co are focusing on casual shoes for the Clarks, Rockport and Dr Martens brands, the company said.
“We believe Feng Tay is well positioned to ride on Nike’s target of 10 percent annual growth through 2020,” Credit Suisse Group AG said in a client note yesterday. “Other growth drivers include more allocation of higher premium sports shoe orders from Nike and new customers for its casual shoes.”
For this quarter, Feng Tay forecast that its footwear shipments would increase 14 percent quarter-on-quarter, or 5 percent year-on-year, to 25.3 million pairs.
Chen said the firm is planning two major expansion projects, setting up another plant in India and acquiring more land in Indonesia.
Feng Tay shares rose 2.6 percent to close at NT$158 on the Taiwan Stock Exchange yesterday.
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