Taiwan’s Pou Chen Corporation, the world’s largest athletic footwear manufacturer, reported a sharp decline in first-half earnings as trade tensions weighed on the Nike and Adidas supplier’s performance.
Net income fell 36.2% to NT$5.15 billion ($159 million) despite revenue edging up 0.9% to NT$129.8 billion ($4.02 billion). The company attributed the profit squeeze to diminished investment returns rather than operational issues.
The results highlight challenges facing Asian footwear manufacturers as US tariff policies create uncertainty. Footwear importers now face 20% tariffs on Vietnamese-made shoes and 19% on Indonesian products, significantly higher than previous levels.
Pou Chen warned that third-quarter shipments will likely decline from second-quarter levels due to seasonal weakness and tariff-related delays. However, management expects fourth-quarter improvement as peak season demand returns.
July revenue dropped 11.5% year-over-year to NT$19.7 billion ($610 million), though the company noted its footwear business has grown for 17 consecutive months.
Subsidiary Yue Yuen Industrial reported July revenue of $668 million, down 1.9%. The retail division struggled more, with Pou Sheng International seeing July revenue fall 8.6% to RMB1.15 billion ($159 million), reflecting cautious Chinese consumer spending.
Pou Chen outlined a “value growth” strategy focused on automation and geographic diversification to reduce trade exposure. The company continues expanding Indian facilities while optimizing Vietnam and Indonesia operations.
Industry executives expect retail shoe prices could rise 5% to 20% this year as manufacturers struggle to absorb tariff costs.
