Taichung-headquartered shoe supplier Pou Chen Corp (寶成工業) on Tuesday reported that its profit last quarter grew year-on-year, thanks to increased revenue contribution from its retail business.
Pou Chen, the world’s largest branded athletic and casual footwear maker, reported a 25.7 percent annual increase in net income to NT$2.05 billion (US$68.58 million) over the January-to-March period, compared with NT$1.63 billion during the same period last year.
The company saw its first-quarter revenue rise 2.6 percent annually to NT$67.26 billion from NT$65.57 billion, with earnings per share increasing to NT$0.69 from NT$0.55.
Gross margin was 25.7 percent last quarter, improving from 25.5 percent a year earlier, it said in a statement.
Pou Chen attributed the improvement in its bottom-line figures to the significant growth of its retail unit, which saw sales last quarter jump 33.5 percent annually to NT$28.07 billion.
The retail business accounted for 41.7 percent of the company’s total sales in the quarter, up from 32.1 percent during same period last year, while shoe manufacturing comprised about 58 percent, sliding from the 67.5 percent it contributed a year earlier.
Pou Chen, which produces more than 300 million pairs of shoes every year, operates its retail business in China through a Hong Kong-listed subsidiary, Pou Sheng International Ltd (寶勝國際), which as of the end of last year operated 8,778 stores.
As Pou Sheng plans a net increase of 250 to 300 stores this year and the sales rate for its stores is expected to retain annual growth of 5 percent, its contribution would still be a great catalyst to the parent company’s earnings momentum, Taishin Securities Investment Advisory Co (台新投顧) analyst Chang Yu-hua (張鈺驊) said in a note published ahead of the data release.
At a meeting last month, Pou Chen’s plan to privatize Pou Sheng was voted down by its shareholders.
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