Miniso Group’s Earnings Call Highlights Robust Growth

Miniso Group Holding Ltd. ((MNSO)) has held its Q1 earnings call. Read on for the main highlights of the call.

The recent earnings call for Miniso Group Holding Ltd. painted a picture of robust performance, marked by significant revenue growth and successful international expansion. However, the company is navigating challenges such as same-store sales declines and increased expenses that are impacting profit margins. Strategic adjustments are underway to address these issues, reflecting a mixed yet optimistic sentiment.

Record Revenue Growth

Miniso Group reported a remarkable total revenue of RMB 4.43 billion, marking a 90% year-over-year increase. This impressive growth surpassed the company’s guidance range of 50% to 80%, highlighting the effectiveness of their strategic initiatives.

Strong Overseas Performance

The company’s overseas revenue reached RMB 1.59 billion, a 30% increase year-over-year. This growth exceeded the upper limit of their 20% to 25% guidance, underscoring the success of their international expansion efforts.

IP Strategy Success

Miniso’s IP strategy has proven successful, with collections like the ChiiKawa New Year, ChiiKawa Cherry Blossoms, and Stitch receiving outstanding market responses and driving sales performance.

Expansion of Large Store Strategy

The company opened five new MINISO locations and established 43 flagship stores. These new stores achieved 27% higher average efficiency compared to stores from the same period of 2024, indicating the effectiveness of their large store strategy.

Adjusted EBITDA Margin Improvement

Miniso’s adjusted EBITDA margin for Q1 2025 improved to 23.4%, up by 7.5%, showcasing the company’s ability to enhance profitability despite rising expenses.

Same-Store Sales Decline

Domestic same-store sales experienced a mid-single-digit decline, although the rate of decline has narrowed, indicating potential stabilization in the near future.

Increased Expenses Impacting Profit Margin

The company faced a 45% increase in combined selling and administrative expenses, leading to a 5 percentage-point rise in the expense ratio compared to the previous year.

Challenges in Northern China

Miniso encountered pressure in same-store improvements in Northern China, particularly in the Northeast and Northwest regions, posing a challenge to their domestic growth strategy.

High Tax Rate

The effective tax rate was reported at 26.6%, higher than expected, primarily due to convertible bonds and related financial expenses, impacting the overall financial performance.

Forward-Looking Guidance

Looking ahead, Miniso remains optimistic about its future performance. The company is focusing on same-store growth, store expansion strategies, and strengthening IP partnerships to sustain high-quality growth. Despite a 5% increase in the expense ratio due to new store openings, the adjusted EBITDA margin climbed to 23.4%. Miniso is committed to cost control, supply chain optimization, and enhancing shareholder returns through dividends and share repurchases.

In conclusion, Miniso Group Holding Ltd.’s earnings call reflected a strong performance with significant revenue growth and successful international expansion. While challenges such as same-store sales declines and increased expenses persist, the company is making strategic adjustments to address these issues. The forward-looking guidance suggests a continued focus on growth and profitability, making Miniso an interesting prospect for investors.