Major textile and garment manufacturers Makalot Industrial Co (聚陽), Eclat Textile Co (儒鴻) and Quang Viet Enterprise Co (廣越) last week reported higher revenue for last month as customers’ inventory adjustments have come to an end and the industry enters the traditional peak season.
Makalot’s revenue rose 20.39 percent from a month earlier to NT$2.8 billion (US$89.21 million), Eclat’s revenue increased 3.17 percent month-on-month to NT$2.68 billion and Quang Viet’s sales expanded 18.55 percent from May to NT$1.89 billion, company regulatory filings showed.
On an annual basis, Makalot’s revenue rose 6.54 percent, while Eclat’s revenue fell 33.87 percent and Quang Viet’s sales dropped 9.62 percent.
Photo: CNA
Makalot’s revenue momentum was relatively weak in April and May, but increased last month due to the peak-season effect and some deferred shipments from previous months, the company said in a statement.
Its second-quarter revenue totaled NT$7.22 billion, down 7.73 percent from the previous quarter and a decrease of 9.38 percent from a year earlier, it said.
Revenue in the first half of this year was NT$15.06 billion, down 1.66 percent year-on-year.
Makalot, a manufacturer of ready-to-wear garments and functional sportswear products, counts GAP Inc, Fast Retailing Co’s GU sub-brand, Kohl’s Corp, Target Corp, Walmart Inc and Dick’s Sporting Goods Inc among its major clients.
The company operates plants in Taiwan, Cambodia, China, Indonesia, Philippines and Vietnam, with those in Vietnam, Indonesia and Cambodia accounting for more than 90 percent of its total capacity.
Yuanta Securities Investment Consulting Co (元大投顧) said in a note on Friday that it remained conservative about the outlook for Makalot’s US orders given customers’ ongoing inventory adjustments.
However, order momentum from the company’s Japanese customer has been recovering thanks to a recovery in apparel consumption in Japan and the customer’s business expansion in the US, Yuanta added.
Makalot’s revenue for this quarter is forecast to increase by about 30 percent from last quarter, driven by seasonal effects, contributions from US rush orders and stable orders from its Japanese customer, Yuanta said.
Eclat’s second-quarter revenue increased 20.36 percent sequentially to NT$7.82 billion, although it declined 30.27 percent from a year earlier.
The garment and fabric supplier’s revenue for the first half of the year dropped 33.07 percent annually to NT$14.32 billion.
Eclat, whose clients include Nike Inc, Adidas AG, Under Armour Inc and Lululemon Athletica Inc, has operations in Taiwan, Cambodia, Indonesia and Vietnam.
“Following customers’ inventory adjustments, Eclat is seeing improvement in its fabric shipments and has begun to produce fabrics for winter clothing. The company is expected to maintain its upward trend in fabric shipments this quarter,” Capital Investment Management Corp (群益投顧) said in a note on Friday. “Orders for its ready-to-wear garments are also predicted to increase gradually.”
Capital predicted an increase in revenue for the firm in the second half of this year, and said that Eclat’s capacity expansion in Indonesia could boost its profitability and counter the risk of an overconcentration of production in Vietnam.
Meanwhile, down jacket and garment maker Quang Viet also expects seasonal demand to drive sales up this quarter, after its second-quarter revenue rose 78.9 percent to NT$4.75 billion from a quarter earlier.
In the first half of the year, revenue declined 5.36 percent to NT$7.41 billion from a year earlier, which the company attributed to inventory adjustments by major sports brands.
“The company is cautiously optimistic about its future operations, as it is in discussions with new brand customers and developing new product projects,” Quang Viet said in a statement.
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