Last Update 28 May 25
Fair value Decreased 26%MINISO’s Q1 Earnings Reveal Growth Momentum Overshadowed by Profitability Concerns
Miniso Group Holding (NYSE: MNSO; HKEX: 9896), the Japanese lifestyle retailer known for its affordable and design-forward everyday goods, reported mixed Q1 results that led to a sharp market reaction, with U.S.-listed shares plunging 17.6% — the steepest single-day drop in over two years. Despite strong revenue growth and continued global expansion, investor concerns over profit margins and rising costs weighed heavily on sentiment.
Key Highlights:
- Revenue Growth Beats Expectations: Q1 revenue rose 18.9% year-over-year to RMB4.43 billion ($610.1 million), slightly ahead of analyst expectations (RMB4.41 billion). This was driven by robust overseas performance and continued recovery in the domestic Chinese market.
- Earnings Miss & Margin Pressure: Adjusted earnings per ADS came in at RMB1.88 ($0.26), falling short of analyst consensus of RMB2.14. Net profit dropped to RMB587.2 million ($80.9 million), down from RMB616.9 million a year ago, with the adjusted net margin shrinking to 13.3% from 16.6%.
- Cost Surge from Global Expansion: Selling and distribution-related costs surged over 46%, attributed mainly to the aggressive rollout of directly operated overseas stores. Overseas store count nearly doubled YoY to 608.
- Solid Overseas Performance: Overseas revenue grew 30.3% and now represents 39% of total sales. Notably, same-store sales in mainland China rose 9.1%, showing domestic resilience.
- Improved Gross Margin, Strong Cash Position: Gross margin improved slightly to 44.2%, and the company closed the quarter with a healthy cash reserve of RMB7.26 billion ($999.8 million).
- Market Reaction & Analyst Response: Bank of America labeled the results a "mixed bag," cutting its price target from $17.10 to $16.50.
While Miniso continues to demonstrate top-line strength and international momentum, the market is clearly demanding clearer signs of cost discipline and profitability. The current volatility underscores the balancing act between growth investment and shareholder returns — a narrative that will remain central as the company moves further into FY2025.
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