Yue Yuen Industrial (Holdings) Ltd. on Monday gave a profit warning for the nine months ended Sept. 30, 2026.
The Taiwanese shoe manufacturer said it expects a profit decrease of between 50 percent to 55 percent following a preliminary review of unaudited consolidated financial statements of the Group. That compares with a profit of $278.7 million in the same year-ago period in 2025.
Yue Yuen attributed the profit decline to “multiple headwinds in the operating environment” of its manufacturing business. “Weak demand led to a contraction in sales scale, which coupled with rising costs and increasing pressure on product efficiency, weighed on the gross profit margin of the Group’s manufacturing business during the period,” the company said.
To be sure, new tariff policies and geopolitical tensions last year created uncertainties for Chinese manufacturers. The uncertainties began in April 2025 when U.S. President Donald Trump’s reciprocal tariff policy — which saw hikes across geographies, with significant impact on China and Vietnam —posed big problems for shoe firms. That led to reduced shipment volumes at Chinese manufacturers as many shoe firms shifted production elsewhere due to tariff fears.
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Yue Yuen’s report on Monday said that “short lead-time orders increased, as brand customers also adopted a more cautious approach to order placement,” which resulted in increased volatility in order demand for the nine-month period. That also led to a decline of 3.8 percent in the Group’s manufacturing business revenue, versus year-ago levels. The company also saw impact from increased labor and overhead costs, including rising wages, and overlapping long holidays across its three main production bases that posed challenges to production scheduling and resource allocation.
And while the firm has said that footwear shipments rose in September, signaling some level of improvement, it wasn’t enough to offset operating challenges that occurred in the first half.
Yue Yuen is a manufacturer of athletic, casual and outdoor shoes. The company also makes shoe uppers, shoe cottoms and completed products consisting of both uppers and bottoms for companies ranging from Adidas, New Balance and Nike to Salomon, Crocs and Timberland, among others.
Last October, shoe firms received a China tariff break lasting one year from “heightened reciprocal tariffs” on China imports. The U.S. Supreme Court in February ruled illegal most of Trump’s emergency tariffs. As of October 2026, the tariff rate on most China imports is around 30 percent, down from a high of 145 percent last year. The bilateral truce between the U.S. and China, signed in September 2026, remains current through Nov. 10, 2026.
