Key Takeaways:
MINISO reported H1 revenue of RMB 11.5 billion, up 22.4 percent, but cut its full-year margin outlook by 3 to 4 points on overseas weakness.
"I firmly believe the strategic direction and the stage-by-stage significance of those initiatives matter far more than the near-term number," Founder and Chief Executive Ye Guofu said.
Overseas revenue rose 14.9 percent to RMB 4.06 billion, with same-store GMV down low single digits. North America grew 37 percent in H1 but slowed to 25 percent in Q2 from about 50 percent in Q1. Overseas inventory days climbed to 273 from 214 a year earlier.
The guidance cut — from a prior 1 to 2 percentage point margin decline to 3 to 4 points — reflects a pivot from expansion to operational quality. Shares fell 2.87 percent premarket to $10.5, near the 52-week low of $10.64 to $25.92.
The overseas business has become the main drag on profit. Its contribution to group profit fell to about 10 to 15 percent in H1 from 35 to 40 percent in 2023, management said. Agent business revenue declined about 10 percent, with Asia and Latin America both posting temporary drops. The company added 75 direct-operated stores in North America, double the year-earlier pace, and the upfront rent, depreciation and labor costs weighed on margins.
Management said it will slow overseas expansion and close weaker locations. In H2, it expects a net reduction of 50 to 70 overseas stores, including 100 to 110 agent closures and 40 to 50 direct-operated additions. It will focus on running its roughly 800 existing direct-operated stores before replicating the model.
China, by contrast, delivered its strongest H1 in three years. Domestic revenue rose 26.2 percent, with same-store sales up mid single digits. The company completed 189 store renovations, and membership sales contribution reached 77.4 percent. Proprietary IP YOYO generated nearly RMB 500 million in H1 revenue, complementing licensed partners such as Disney and Sanrio.
TOP TOY, the designer-toy unit, grew 32.7 percent to RMB 985 million in H1, but Q2 growth slowed to 16.9 percent from about 51 percent in Q1. Global stores reached 365, with overseas locations rising to 48 from 10.
Adjusted operating profit fell 6 percent to RMB 1.49 billion, while adjusted net profit declined 1.7 percent to RMB 1.22 billion on an FX-adjusted basis. Gross margin held flat at 44.3 percent. Operating cash flow rose 45.5 percent to RMB 1.48 billion, and cash stood at RMB 7.39 billion.
The margin downgrade shows management expects overseas execution to stay under pressure through year-end. CFO Zhang Jingjing said 2027 could be the turning point for profit margins. Investors will watch H2 overseas store closures and North America same-store sales, guided to low single-digit growth for the full year.
This article is for informational purposes only and does not constitute investment advice.
