MINISO (Minutes): It is expected that same-store sales in both China and the US will achieve double-digit growth in the fourth quarter.
The following are the Minutes of MINISO's$Miniso(MNSO.US) $MNSO(09896.HK) Q3 FY25 earnings call organized by Dolphin Research. For earnings interpretation, please refer to "MINISO: Revenue 'Money Printing Machine', Spending 'Shredder'"
- Review of Core Financial Data
- Details of the Conference Call
Strategic Direction and Growth Quality:
The group is shifting from scale-driven growth to a development paradigm that emphasizes both quality and scale, focusing on high-quality growth. Growth is primarily driven by increased same-store sales, reflecting a more sustainable and lower operational risk model, showcasing the resilience and growth potential of the business model.
MINISO China Business:
Revenue increased by 19.3% year-on-year, significantly outperforming the overall retail growth rate in China. The fundamental driver is the enhancement of systematic operational capabilities, including precise product planning based on data analysis (such as the toy category) and end-to-end customized operations. The expansion of the franchise system enhances the maturity of the business ecosystem. The National Day holiday boosted October's same-store sales to achieve low double-digit growth.
MINISO International Business:
Management efficiency and brand exposure are enhanced through the store expansion committee mechanism and cluster store opening model. Membership programs drive revenue growth and increase repurchase rates. The product portfolio adopts a strategy of same style different seasons and monthly themes to meet diverse needs with a balanced matrix.
TOP TOY Business:
Benefiting from enhanced product competitiveness and rapid scaling of proprietary intellectual property. IP value is converted through immersive store displays, improving gross margins. The first themed street block was launched in Guangzhou, with sales surpassing the monthly performance of regular stores.
Milestones and Innovation:
Achieved two major milestones: over 8,000 global stores and quarterly revenue exceeding 5 billion yuan for the first time. China's upgrade strategy is advancing, with the first "front store, back factory" model store opening in Shenzhen, highlighting IP content presentation and the advantages of being a major store in shopping centers. The proprietary IP matrix has signed 16 artist IPs, strengthening consumer emotional connections through immersive scenarios.
Future Outlook and Guidance:
Confident in achieving full-year guidance, expecting annual revenue growth of 25% and operating profit of 3.65 billion to 3.85 billion yuan. Fourth-quarter revenue is expected to grow by 25% to 30%, with double-digit growth in same-store sales in both China and the US. The full-year same-store sales growth rate in China and the US is expected to reach mid-single digits. Fourth-quarter operating profit is expected to grow by double digits year-on-year, with a narrowing decline in profit margins. The global business layout diversifies operational risks, especially in response to macro challenges in Southeast Asia.
IP and Product Strategy:
The group maintains a balanced and diverse IP portfolio, covering international licensing, local content, and independent development paths. Through full-category coverage and flexible product portfolio adjustments, it strengthens cost-effectiveness advantages and market adaptability.
2.2 Q&A Session
Q: Regarding domestic MINISO business, from a macro perspective, despite the slowdown in consumption, same-store sales and overall revenue growth continue to accelerate. The company seems to have accelerated the introduction of new store formats, such as the new format of the MINISO brand.
A: We are expanding spaces and upgrading stores to provide greater advantages and more standardized spaces. Large stores offer better experiences and more attractive displays for consumers. Opening large stores has higher entry barriers, and only MINISO's extensive IP portfolio and category foundation can support the large store format. The initial success of channel optimization in 2025 has accumulated systematic methods and experience, but the number of optimized stores is still small. In the coming years, we will proactively plan store optimization work, hoping to optimize more stores next year.
The pace of store renovation is gradual and will not be rushed, requiring suitable locations and choices. Many existing stores already have good profit margins, and strategies will be advanced based on leasing and new store locations. In the first three quarters, we relocated, expanded, and optimized over 200 stores. Optimized sample stores show significant efficiency improvements, maintaining healthy sales per square meter, and reducing the rent-to-sales ratio to low single digits, achieving a win-win for the company and franchisees. Store optimization will become a regular part of channel expansion work.
Q: Regarding international outlook, Q4 is the peak season, last year there were adjustments, what are the noteworthy aspects in inventory preparation, marketing, and store operations for Q4 this year? And the international strategic planning for next year.
A: The September ordering meeting was very successful, with record-breaking order amounts, with each of the five categories exceeding 100 million orders, breaking historical records. Category balance and IP products have strong creative prospects, and cost-effective products continue to enhance cost and pricing competitiveness. International localized IP design and category implementation have improved, such as the limited edition airport store exclusive products launched in Singapore in October, perfectly matching channels and products, creating a new single-store record. From initial market insights to creative design to logistics support to integrated marketing, every step is closely coordinated, showcasing the integration of IP product store operations and marketing capabilities. The global release of the Zootopia movie received praise from the director for MINISO TOP TOY stores. We are confident in long-term international opportunities.
MINISO's achievements in the Chinese and US markets provide systematic insights: optimizing store opening decision mechanisms, creating differentiated store models, product channel matching, and full-fan marketing collaboration. The international market is a long-term core potential area for MINISO, and these systematic operational frameworks will gradually be replicated in more countries and regions, focusing on long-term sustainable profitability, steadily unlocking global market opportunities.
Q: The IP strategy is important for same-store sales growth, but investors are concerned about the sustainability of growth. How do you compare it with non-IP products, especially products from existing suppliers? For example, compared to Muji, Muji has performed well in China in the past few quarters. How sustainable is the growth? Which categories will have sustained growth in the near term? What are the plans?
A: In consumption, the most important and best is interest-driven consumption. Consumers no longer only pursue product functionality but also value aesthetic identity, social labels, auditory experience, and spiritual satisfaction. Future consumers will pay for passion and emotion. Interest-driven emotional connection consumption demands have higher stickiness and premium space, becoming the company's core competitiveness and differentiation key.
The IP transformation does not disrupt existing category advantages but drives IP and core categories, releasing greater value from ten years of accumulated experience. The supply chain resources cover home goods, cosmetics, stationery, toys, and snacks, along with mature multi-category product development capabilities, supporting the implementation of the IP strategy. MINISO is a globally unique business model. IP empowerment is not just about single-point hits but full penetration. The key to product development capability is understanding how categories and IP empower, not just printing logos.
For example, since November, seasonal product growth has been fast, with blood fragments and globes capturing traffic brought by IP. Original key categories such as home goods, cosmetics, and stationery contribute stable traffic and repurchase. IP is a growth catalyst, enhancing product design attractiveness and brand collaboration. Utilizing IP popularity to boost core category sales. The model is unique because single IP brands lack multi-category supply chain support, making it difficult to cover all scenarios. Traditional grocery brands lack IP development and operational capabilities, but MINISO's ten-year accumulation of multi-category supply chain and IP integration development capabilities allows IP to quickly penetrate high-frequency consumption, with key categories using IP to break growth bottlenecks, ultimately forming a healthy growth structure.
Q: The US business has strong Q4 seasonality, and Q1 2026 will have seasonal declines. In improving operational efficiency to buffer seasonal impacts, will the seasonal decline trend from Q4 2025 to Q1 2026 be similar or better than last year?
A: Q1 is usually the off-season in the US, with store sales 10% to 20% lower than the Q4 peak, which is common practice in the US retail industry. Methods to smooth seasonality include store operations and opening strategies. In Q4, ensure all stores are ready, not opening new stores in Q4 to ensure stores are in place in the first three quarters of each year. For example, at least half of the committed stores for 2026 have been signed. In Q1 2026, smooth seasonal scale through store growth. Operationally, follow trends, utilize seasonal bonuses like Black Friday promotions, and prepare inventory and supply chain to meet shopping festival demands. Q4 will still achieve good growth, not giving up growth opportunities, converting fluctuations into business paradigms through marketing, seasonal discipline, and strategic inventory building.
Q: The recent US consumer market is relatively weak, and the retail market is performing poorly. What are your observations on the US market, especially the same-store sales growth (SSSG) in October? How to respond? What is the outlook for US market full-year revenue and profit guidance?
A: High-frequency consumption data in the US does show weakness, which is external environmental pressure that cannot be avoided. Our strategy is to do our best, including preparing for holidays, efficient inventory, and good adaptation. We have already completed holiday experience creation in advance, with store inventory more abundant than last year. US Q4 revenue is expected to achieve low double-digit growth, specifically 50% to 55%, with same-store sales also achieving low double-digit growth. Although the pace of store openings has slowed, Q4 scale growth will be slower than Q3, but profits will still achieve healthy growth.
Q: Regarding independent design IP, the company, investors, and consumers have high expectations. Looking ahead to the next 3 years, how will designers and independent design IP develop? Will there be a designer ecosystem, organize trendy play communities, or invest in the second-hand market?
A: As of the end of June, 9 designer IPs have been signed, with 16 signed in the third quarter. We are actively exploring high-potential original toy art IP globally, striving to build MINISO's trendy play IP ecosystem. Once an IP breakthrough occurs, it will present exponential growth. The upper limit of independent IP volume is anchored in the interest consumption market. Generation Z has become a key consumer force, with nearly 260 million people and annual consumption exceeding 5 trillion yuan, willing to pay for emotional value. At the same time, independent IP growth always has risk control. We conduct small batch trial sales, data integration, and adjust design styles and categories based on market demand and feedback. This model allows independent IP to grow steadily within a safe trial-and-error framework, avoiding the pain points of high investment, high risk, and unpredictable returns in traditional IP incubation.
MINISO has huge advantages: full-category coverage, full-channel penetration, global layout, and full-link operations. The store itself is an ecological field, with MINISO LAND and MINISO FRIENDS having independent IP character check-in points, sculpture models, signing areas, exclusive product display areas, and interactive activities (such as gifted family). Products are the key to the IP ecosystem; good products do not consume IP but enhance IP value. The Yu Yu second-generation ring achieves excellent sales through product innovation and playability, maximizing secondary creation attributes. In terms of marketing, MINISO's holiday Gifted Bell performance supports store opening activities, playing cute animations at the store checkout area to enhance IP exposure, strengthening IP personality and image.
Q: Domestic business continues to improve, with more large and high-performance stores emerging. What is the forecast for business development and store numbers next year? How is the current retail market situation in overseas markets (especially the US)? Is there pressure? What are the differences in performance across regions?
A: In China, we have confirmed that we will seek high-quality growth, which is closely linked to store growth. It is expected to achieve mid-double-digit or even high-double-digit growth, supported by improvements in same-store sales growth (SSSG). The SSSG target for 2026 has not been confirmed, but we hope to reach the best level in the industry.
In the international market, the third quarter's weaker performance was in the third-party agency market, especially in Southeast Asia and Latin America, affected by macroeconomic seasonality, local currency exchange rate fluctuations, and changes in consumption tax. However, we see GMV growth far exceeding shipment GMV growth, with healthy agency inventory, ready for 2026. Some key markets like Southeast Asia have accelerated GMV growth in the third quarter, achieving double-digit growth. We observed that some comparable listed companies in Southeast Asia showed improvement in October consumption, but we are still observing performance. We are actively adjusting product portfolios and channels, with order meetings reaching new highs, believing that high orders will translate into revenue contributions in the coming quarters. We are confident in the success of the US and China markets, proving business capability and resilience.
Overseas markets have direct and agency businesses. Direct business can first reach and demonstrate key market perception capabilities and quick response; agency business management is more challenging, and we are adjusting product portfolios and channels, having found the root cause, needing time to improve performance through execution.
Q: The equity incentive plan is relatively large, and TOP TOY's equity incentives have been included in Q3 performance. Can you share details of the equity incentive plan, internal KPIs, and next quarter's outlook? Will such incentives continue in the coming quarters?
A: Expenditure for this quarter and the next quarter is relatively high, stemming from TOP TOY's equity incentive plan. TOP TOY's revenue doubled this quarter, significantly exceeding expectations. We believe that an excellent team in an excellent industry combined with incentive mechanisms can unleash more growth potential. Equity incentive expenses for this quarter are 100 million yuan, and next quarter will also be 100 million yuan. This is normal accounting treatment, with higher expenses in the first few quarters after IPO, gradually diluting and reducing in subsequent quarters.
Q: TOP TOY's prospectus has been submitted, what is the IPO timeline? How will the relationship with MINISO be after listing? How to protect the interests of MINISO stakeholders?
A: POP TOY has always been a wholly-owned subsidiary of MINISO, and MINISO shareholders also benefit from its high growth. The IPO plan is underway, and any progress will be notified to the market. The sole purpose of the IPO is to hope POP TOY can become stronger, continue to expand its business, and fully seize the broad opportunities in the trendy play market.
We believe that the joint development of MINISO and POP TOY is the best strategy. MINISO can leverage its full-category, full-channel operations, and global layout, combined with POP TOY's advantages as a professional trendy play brand. The trendy play market is growing rapidly, and we believe that both businesses can make us top in both markets.
