Outdoor footwear supplier Fulgent Sun International Holding Co Ltd (鈺齊國際) on Friday said its net profit last quarter rose to a record high, thanks to robust customer demand for its Gore-Tex-certified shoes.
Net profit reached NT$122.87 million (US$4.07 million) in the July-to-September quarter, a 9.2 percent increase from NT$112.54 million a year earlier, with earnings per share of NT$0.85, the company said in a statement. Sales jumped 27.9 percent annually from NT$2.13 billion to NT$2.72 billion last quarter.
However, gross margin slid to 15.6 percent from 17.51 percent a year ago and 20.6 percent in the previous quarter, which the company blamed on its recent capacity adjustments.
Fulgent Sun said it would continue to add several new production lines in its Cambodian and Vietnamese plants in the near term, in an effort to lift the company’s overall capacity by between 10 percent and 15 percent annually this year.
The company said the expansion projects might weigh on its margin in the near term, as it has to adjust production lines to meet growing client demand, but added that margin would improve after the projects are completed.
The Douliou City (斗六), Yunlin County-based company said it is upbeat about this quarter’s business performance, but did not give specific details about its financial guidance.
Founded in 1994, Fulgent Sun produces both outdoor and sport shoes on a contract basis. The company has manufacturing bases in China, Vietnam and Cambodia.
The ongoing expansion projects in Southeast Asia are in line with the company’s strategy to reduce reliance on its Chinese plants, which contribute about half of its production volume.
The company is also adjusting its product mix by increasing sales of Gore-Tex-related outdoor shoes and products, which fetch higher prices and have wider profit margins than sport shoes.
This year, the company plans to allocate NT$500 million for capacity expansion, Fulgent Sun spokesman Sunny Liao (廖志誠) said in March. The figure is the same as last year’s.
Accumulated net profit reached NT$624.9 million in the first three quarters of the year, a 30.3 percent increase from a year ago, while revenue rose 12.1 percent year-on-year to NT$7.64 billion, the company said.
From January to last month, the company’s gross margin stood at 20 percent and its operating margin was 11 percent.
Fulgent Sun stock gained 1.08 percent to close at NT$74.9 on Friday in Taipei trading, beating the broader market, which edged up 0.12 percent. The firm’s stock price has risen by more than 20 percent since the beginning of this year, Taiwan Stock Exchange data showed.
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