Release Date: November 29, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- MINISO Group Holding Ltd (MNSO, Financial) reported a 23% year-over-year increase in revenue, reaching RMB12.28 billion for the first three quarters of 2024.
- The company added 859 stores on a net basis, including significant expansions in both China and overseas markets.
- Overseas revenue grew by 41%, with directly operated markets showing a 64% increase.
- The company's gross profit margin improved by 3.7 percentage points to 44.1%, driven by a shift in revenue structure and successful IP strategy.
- MINISO Group Holding Ltd (MNSO) maintained a strong cash reserve of nearly RMB6.3 billion, providing financial stability and flexibility for future growth.
Negative Points
- Same-store sales in China showed a mid-single-digit decline, reflecting challenges in the domestic retail environment.
- Selling and administrative expenses increased by 54%, with selling expenses up by 63%, impacting overall profitability.
- Inventory turnover days for overseas directly operated markets increased, indicating potential inefficiencies in inventory management.
- The company faces potential risks from US tariff increases, which could impact cost structures despite efforts to mitigate through local sourcing.
- MINISO Group Holding Ltd (MNSO) is experiencing pressure in the offline retail sector, particularly in China, due to a challenging macroeconomic environment.
Q & A Highlights
Q: Can you provide an outlook for Q4, especially considering the current market conditions in China and the impact of the Double 11 sales festival?
A: Jingjing Zhang, CFO, stated that they are confident in achieving their targets set at the beginning of the year. They expect Q4 topline growth to be around 25% to 30%, with overseas markets growing by 45% to 50%. In China, they anticipate a low-teens growth, despite the pressures faced in Q3. The company plans to expand its store network significantly, with 1,200 new stores globally by the end of the year.
Q: How is MINISO planning to accelerate store expansion in the US and European markets?
A: Guofu Ye, CEO, mentioned that the US market is experiencing mid-single-digit growth, with plans to accelerate store expansion to capitalize on the best sales season in Q4. They are focusing on improving operational efficiency and controlling costs to enhance profitability. In Europe, particularly the UK, they are supporting distributors to optimize product offerings and store operations.
Q: What are the strategies for improving Yonghui's performance post-acquisition?
A: Guofu Ye outlined four key strategies: optimizing procurement costs, supporting Yonghui in building self-owned brands to improve gross profit margins, enhancing store operational efficiency, and concentrating resources on profitable stores while closing underperforming ones. These measures aim to improve Yonghui's financial performance and operational efficiency.
Q: What is the contribution of the Harry Potter IP, and what are the future plans for IP collaborations?
A: Guofu Ye highlighted that the Harry Potter IP has been successful, particularly in overseas markets, contributing significantly to sales. They plan to continue leveraging popular IPs, with 150 IPs in the pipeline, to drive future growth. The company aims to expand its IP strategy both horizontally and vertically to enhance revenue.
Q: How is MINISO addressing the competition in the ACG (Anime, Comic, and Game) market and the millet economy?
A: Guofu Ye emphasized MINISO's professional approach to the ACG market, leveraging strong IP partnerships and talent to maintain a competitive edge. They plan to launch new products monthly in 2025, focusing on innovation and differentiation to capture market share in the growing millet economy.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
