Miniso Earnings Call: Rapid Growth, Margin Trade-Offs

Miniso Group Holding Ltd. ((MNSO)) has held its Q4 earnings call. Read on for the main highlights of the call.

Miniso Group Holding Ltd. struck an upbeat tone on its latest earnings call, highlighting record quarterly and full‑year revenues, surging GMV and strong cash generation. Management leaned into a narrative of “high‑quality growth,” underpinned by rapid international expansion and proprietary IP, while acknowledging that heavier operating investments and financing costs are weighing on near‑term profitability.

Record Revenue and GMV Milestones

Miniso delivered a standout quarter, with Q4 revenue jumping 32.7% year on year to more than RMB 6.25 billion and single‑quarter GMV topping RMB 10 billion for the first time. For the full year, group revenue reached RMB 21.44 billion, implying growth of about 26.2% and underscoring the scale benefits from an expanding global store network.

Balanced Growth Across China and Overseas

The core MINISO brand posted Q4 revenue of RMB 5.65 billion, up roughly 27.7% year on year, with growth balanced between home and abroad. Mainland China generated RMB 2.87 billion, up 25% and representing 51% of the quarter, while overseas MINISO revenue grew 30.5% to RMB 2.78 billion and now accounts for about half of the business.

TOPTOY Emerges as a Second Growth Engine

TOPTOY continued its rapid rise, with Q4 revenue around RMB 600 million, more than doubling year on year, and full‑year revenue reaching RMB 1.9 billion. The format’s store base climbed to 334 locations, including 30 overseas, signaling Miniso’s push to diversify beyond the main banner into higher‑growth, IP‑driven concepts.

Turnaround Momentum in the U.S. Market

The U.S. operation, once a drag, is now a bright spot, with full‑year growth exceeding 60% and Q4 same‑store sales rising more than 20%. Membership in the U.S. surged 150% year on year, and members now drive over half of local revenue, helped by improving unit economics, higher average order values and leaner labor and logistics costs as a share of sales.

High-Quality Stores and Renovation Upside

By year‑end, Miniso’s global footprint approached 8,500 stores, supported by a growing fleet of large‑format MINISO Land locations in China, which expanded to 26 sites. Renovations are proving highly accretive, with 290 upgraded stores in 2025 delivering average sales uplifts of 40% to 50%, and large and flagship formats now representing about 10% of domestic stores but nearly 20% of domestic GMV.

IP Strategy and Youyou Proprietary Success

Miniso’s push into proprietary IP is gaining traction, led by the Youyou brand, which surpassed RMB 100 million in sales within six months of launch. Early 2026 revenue for Youyou reached RMB 165 million in the first quarter, and management sees potential for RMB 600 million to RMB 1 billion in 2026, while a pipeline of 30 to 40 proprietary IPs aims to deepen differentiation and pricing power.

Margins, Cash Generation and Shareholder Returns

Despite rising costs, Q4 adjusted operating margin came in at 17%, with full‑year adjusted operating profit at RMB 670 million and Q4 adjusted net profit up about 7.6% to RMB 850 million, lifting adjusted EPS by 9.4%. Cash flow remained strong, with RMB 2.58 billion of operating cash in 2025 and a RMB 7.1 billion cash balance, enabling RMB 1.9 billion in dividends and buybacks, roughly 66% of adjusted net profit.

Global Store Expansion Led by Overseas Markets

The group’s international footprint continued to accelerate, adding a net 465 overseas stores in 2025 to reach 3,583 locations and driving full‑year overseas revenue growth of about 30% to 33%. For 2026, management plans 510 to 550 net new stores globally, including around 250 overseas and 120 in China, reinforcing Miniso’s positioning as a global value‑retail brand.

Investment-Led Margin Pressure

Profitability is under pressure as Miniso leans into direct‑operated expansion and heavier investment in licenses and operations, with Q4 gross margin slipping to 46.4% from 47% and full‑year gross margin flat at 45%. Management estimated that these investments shaved roughly three percentage points from adjusted operating margin for the year, trading near‑term margin for scale and brand strength.

Operating Expenses Climb Faster Than Sales

Operating expenses rose sharply, with Q4 opex up 45.3% year on year as sales expenses climbed 47.4% and administrative costs 36.3%. The increase reflects higher costs for direct‑operated stores, a more than doubling of license fees, now around 3% of revenue, and stepped‑up advertising and marketing to support new formats and IP.

Heavy Non-Operating and One-Off Losses

Reported earnings were hit by sizable non‑operating items, with Q4 adjustments of about RMB 900 million and RMB 1.69 billion for the full year to reconcile to adjusted net profit. A major contributor was a Q4 post‑tax loss of RMB 1.84 billion at YH, while interest on the YH acquisition loan and other financing costs remained substantial across the year.

Share-Based Pay and Financing Costs Increase

Share‑based compensation more than quadrupled year on year to RMB 150 million in Q4 and RMB 370 million for the full year, reflecting richer employee incentives. Financing costs also weighed on the bottom line, with convertible bond interest expenses totaling roughly RMB 190 million for the year, much of it non‑cash, adding complexity to the gap between reported and adjusted earnings.

Inventory Build and Tariff Concerns Abroad

Working capital efficiency slipped as group inventory days stretched to 100 from 91, driven largely by overseas operations where inventory days climbed to 228. Management said it built international stock ahead of potential tariff changes, which protects supply but raises the risk of future inventory adjustments and underscores sensitivity to trade policy.

Regional Mixed Picture in Emerging Markets

Performance across international markets was uneven, with Asia and Latin America lagging the broader international portfolio on same‑store sales. Southeast Asia is facing operational headwinds that will require strategic upgrades in 2026, while Mexico encountered challenges in 2025 and may need reformatting and more flagship stores to unlock its longer‑term potential.

Short-Term Profit Dilution from Direct-Operated Shift

Miniso’s shift toward more direct‑operated overseas stores is accelerating revenue but diluting margins in the near term, as the share of direct‑operated overseas revenue jumped from about one‑third to more than half in a year. Several key direct‑operated markets remain in early investment phases, and their losses are expected to weigh on group profitability before maturing.

Guidance and Forward-Looking Outlook

For 2026, management guided to continued “high‑quality” expansion, targeting group revenue growth in the high‑teens and framing a three‑year CAGR of at least 22%, while at one point also mentioning a growth floor above 25%, which may confuse some investors. The company plans 510 to 550 net new stores, expects low‑ to high‑single‑digit same‑store gains in China and strong double‑digit growth in North America, and aims for faster growth in adjusted operating and net profit driven by store upgrades and large‑format MINISO Land openings.

Miniso’s latest call showcased a company in aggressive expansion mode, blending robust top‑line growth, international traction and IP innovation with a willingness to stomach near‑term margin pressure. Investors will need to balance the attractive revenue and cash‑flow story against rising costs, financing burdens and some regional growing pains, but the long‑term growth narrative remains firmly intact.