Miniso Group Holding Ltd. ((MNSO)) has held its Q3 earnings call. Read on for the main highlights of the call.
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The latest earnings call from Miniso Group Holding Ltd. conveyed a generally positive sentiment, driven by robust revenue and profit growth, particularly in international markets such as the U.S. The strong performance of flagship brands MINISO and TOP TOY also contributed to the upbeat outlook, despite some challenges in Southeast Asia and increased share-based compensation expenses. Overall, the strategic achievements and growth momentum overshadowed the hurdles faced by the company.
Revenue Growth
Miniso Group reported an impressive revenue increase of 28.2%, hitting the high end of their guidance. This accelerated growth underscores the company’s effective strategies and market penetration, providing a strong foundation for future expansion.
Flagship Brands Performance
The MINISO brand experienced a 23% growth, while TOP TOY showcased an exceptional 111% revenue growth. These figures highlight the brands’ strong market presence and consumer appeal, contributing significantly to the company’s overall success.
Profitability Milestone
For the first time, Miniso’s adjusted operating profit surpassed RMB 1 billion, marking a 40.8% increase. This milestone reflects the company’s efficient operations and cost management strategies, enhancing shareholder value.
International Expansion
The U.S. market was a standout performer, with revenue growth exceeding 65% and same-store sales growth in the low double digits. This expansion is a testament to Miniso’s successful international strategy and brand acceptance.
Store Network Expansion
Miniso expanded its international store network with a net addition of 170 stores during the quarter, demonstrating its commitment to increasing global footprint and accessibility.
Inventory and Cash Flow Management
The company improved its inventory turnover and maintained a robust cash reserve of RMB 7.77 billion, indicating strong financial health and operational efficiency.
Challenges in Southeast Asia
Despite the overall positive performance, Miniso faced operating challenges in Southeast Asia due to macroeconomic downturns and social unrest, which affected regional performance.
High Share-Based Compensation (SBC)
The company’s SBC expenses rose significantly to RMB 176 million, primarily due to the TOP TOY equity incentives plan, impacting the financials.
Effective Tax Rate Increase
Miniso’s effective tax rate increased to 33.9% from 24.8% the previous year, mainly due to non-deductible expenses, affecting net profitability.
Forward-Looking Guidance
Looking ahead, Miniso Group aims for high-quality development focusing on both scale and quality. The company expects a full-year revenue growth of 25%, supported by stable gross profit margins and continued international expansion. This optimistic outlook reflects Miniso’s strategic focus and market opportunities.
In conclusion, Miniso Group Holding Ltd.’s earnings call highlighted a positive sentiment with strong growth in revenue and profitability, driven by international expansion and flagship brand performance. Despite some regional challenges and increased expenses, the company’s strategic achievements and forward-looking guidance suggest a promising future for investors and stakeholders.