Stella International (1836) H1 2026 earnings summary

Executive summary

• Revenue for the first half of 2026 reached $786.7m, up 1.5% year-over-year, with shipment volumes flat at 27.5m pairs and higher ASP driven by product mix in the Sports segment.

• Net profit declined to $63.6m from $78.1m, reflecting lower gross margin, higher costs, and investment in new factories and R&D.

• 2026 is positioned as an investment year, with significant capital allocated to new factories and R&D expansion, including the commissioning of three new factories and a Vietnam R&D centre progressing on schedule.

• Adjusted net profit, excluding fair value changes in Lanvin Group investment, was $64.2m.

• Interim dividend of HK42 cents per share declared, maintaining a 70% payout ratio; up to $60m additional cash return planned for 2026.

Financial highlights

• Gross profit fell 8.8% to $159.8m; gross margin dropped to 20.3% from 22.6% year-over-year due to higher raw material and labor costs.

• Operating profit before fair value changes decreased 12.3% to $74.3m; operating margin at 9.4% versus 10.9% prior year.

• Adjusted net profit was $64.2m (margin 8.2%), down from $77.9m (margin 10.1%).

• Dividend per share was 42 HK cents, down 19.2% from the prior year.

• Net cash position at $191.7m, down from $291.3m a year earlier, after dividend and special cash returns.

Outlook and guidance

• Full-year shipment volumes expected to remain broadly flat amid macroeconomic and geopolitical uncertainties.

• Three new factories in Bangladesh, Indonesia, and Vietnam scheduled to commence operations in 2H2026, adding 20m pairs of capacity over coming years.

• Handbag and accessories business to remain loss-making in 2026 as investments continue.

• Commitment to return up to $60m to shareholders via share repurchases and special dividends, maintaining a 70% payout ratio.