Fulgent Sun Group (鈺齊國際), an outdoor footwear supplier to global brands such as Timberland, is this quarter expected to post a 15.1 percent quarterly decline in sales as a strong New Taiwan dollar might continue to weigh on the company’s revenue growth, Jih Sun Securities Investment Consulting Co (日盛投顧) said in a report earlier this month.
In light of the foreign-exchange factor, the brokerage said it has cut its sales estimate for Fulgent Sun to NT$2.33 billion (US$7.94 million) from the NT$2.74 billion it previously estimated.
The company posted sales of NT$2.75 billion for last quarter.
Net profit is expected to fall 1.5 percent quarter-on-quarter to NT$1.91 billion, Jih Sun said.
“Fulgent Sun’s performance last month was much worse than our expectations, despite the company entering its traditional peak season,” Jih Sun analyst Channie Wang (王章妮) said in a note released on Feb. 9.
The Yunlin-based company reported sales of NT$915.15 million for last month, down 24.2 percent from NT$1.207 billion a month earlier and down 24.1 percent from NT$1.205 billion a year earlier, according to a company filing.
Jih Sun also reduced its full-year sales forecast for Fulgent Sun from NT$11.44 billion to NT$11.03 billion, although the shoemaker said it anticipates solid demand from new clients this year.
The company, which has more than 40 brand clients worldwide, expects to secure orders from three to five new clients this year, according to the brokerage’s note.
Fulgent Sun’s global brand customers include Under Armour and Columbia, the company’s Web site showed.
Despite the less optimistic business outlook, last year was favorable for the company, due partly to increased revenue contribution from its high-priced outdoor products.
The company last year posted record-high earnings per share of NT$5.76, up from NT$5.23 the previous year, with net profit increasing 16.6 percent from NT$702.26 million to NT$818.7 million.
Sales totaled NT$10.39 billion, also a record high and up 14.4 percent from NT$9.08 billion a year earlier.
Operating margin was 10.9 percent over the period, up from 7.7 percent in 2016, which the company attributed to a better product portfolio.
By revenue breakdown, sales from outdoor footwear accounted for nearly 90 percent of the company’s total sales last year, compared with 84.2 percent in 2015.
The improved product portfolio helped lift Fulgent Sun’s average selling price from US$24.2 to US$29 over the past two years, data showed.
The company did not disclose its foreign-exchange losses for last year, but said that the mounting losses shaved about NT$0.87 off its earnings per share.
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