Stella International Q3 revenue up 2.2%, shipment volumes down 4.3%

what happened

Hong Kong footwear manufacturer Stella International posted third-quarter revenue of $412.9 mln, up 2.2% from a year earlier, according to Reuters. Shipment volumes dropped 4.3%, which the company attributes to production pulled forward earlier in the year for its customer Casual.

Average selling price per pair climbed 6% year on year, helped by a richer product mix and higher raw material costs. For 2026 the company plans share repurchases and special dividends of up to $60 mln. It expects its new Vietnam factory to keep ramping up output through 2027, while factories in Indonesia and Bangladesh are slated to begin operations in the fourth quarter of 2026.

Stella also expects profit growth from its Three-Year Plan to show up in 2026 through 2028. The median 12-month analyst price target stands at HK$13.50, about 8.2% above the October 14 close of HK$12.48, and the average rating on the shares is hold. Investors will watch whether higher prices and new capacity can offset the drop in shipments.

why it matters

The shares trade at 10 times next 12-month earnings, compared with a P/E of 9 three months ago, so the market is already pricing in part of the expected recovery. Whether this rerating holds will depend on how quickly the new plants contribute to volumes.

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