Pou Chen's (TPE:9904) major unit Yue Yuen Industrial expects profit attributable to shareholders to plunge about 50% to 55% annually in the first quarter from $75.8 million, according to a Tuesday Taiwan Exchange filing.
Shares slid about 1% in Wednesday's late morning trade.
The decline was mainly driven by a 5.5% fall in manufacturing revenue amid weaker demand and cautious ordering by brand customers, alongside tariff-related pressures.
Rising labor costs and increased headcount, as well as production inefficiencies caused by holiday-related disruptions across China, Vietnam and Indonesia, also weighed on margins.
The company said seasonal misalignments and operational bottlenecks led to higher unit costs, hurting short-term profitability in its manufacturing business.
Yue Yuen added that results are preliminary and subject to change, with full unaudited earnings due for release on May 13.