Miniso Group Holding Ltd. ((MNSO)) has held its Q4 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 growth and strategic expansion, tempered by some operational challenges. The general sentiment was positive, driven by significant global expansion and strong performance in overseas markets, although issues like same-store sales pressure and high operating expenses were noted. Despite these hurdles, the company’s strategic initiatives and growth drivers suggest a promising outlook.
Significant Store Expansion
Miniso’s global footprint expanded significantly by the end of December 2024, with the total store count reaching 7,780. This marks a net increase of 1,219 stores for the year, including 460 new stores in China and 631 overseas. This expansion underscores the company’s aggressive growth strategy and its commitment to increasing its global presence.
Strong Overseas Revenue Growth
The company reported impressive overseas revenue growth, reaching RMB 6.68 billion, a 42% increase. Particularly noteworthy was the U.S. market, which showed triple-digit compound growth from 2021 to 2024, highlighting the effectiveness of Miniso’s international market strategies.
Improved Gross Margin
Miniso’s gross margin saw a significant improvement of 3.7 percentage points in 2024, reaching 44.9%. This was attributed to strategic revenue structure adjustments and effective intellectual property strategies, which have bolstered profitability.
TOP TOY Profitability
TOP TOY, a subsidiary of Miniso, achieved remarkable success with a 45% revenue growth and profitability for the first full year. The gross margin improved by 7.3%, reflecting the brand’s growing market presence and operational efficiency.
ESG Rating Upgrade
For the third consecutive year, Miniso achieved an upgrade in its ESG rating, receiving an MSCI rating of AA. This reflects the company’s ongoing commitment to environmental, social, and governance standards.
Same-Store Sales Pressure
Despite overall growth, same-store sales faced pressure in 2024, experiencing a low single-digit decline compared to the previous year. This indicates potential challenges in maintaining sales momentum in existing locations.
High Operating Expenses
Operating expenses rose by 52%, primarily due to the costs associated with newly opened directly operated stores, especially in overseas markets. This increase highlights the financial challenges of rapid expansion.
Challenges in Directly Operated Stores
Directly operated stores reported the lowest gross margin among store formats, though they present significant optimization potential in the long term. This suggests that while these stores are currently less profitable, they could become more efficient with strategic adjustments.
Inventory Turnover Challenges
The company faced challenges with inventory turnover, particularly in overseas markets, where turnover days increased to 187 from 131 the previous year. This highlights the need for improved inventory management strategies.
Forward-Looking Guidance
Looking ahead, Miniso is optimistic about sustained growth. The company reported a significant revenue growth of 23%, reaching approximately RMB17 billion. With plans to double the store count by 2028, Miniso aims to enhance store quality, improve member loyalty, and expand its global supply chain to reduce dependency on Mainland China. The positive outlook for 2025 is supported by strategic store expansions and operational optimizations.
In summary, Miniso’s earnings call conveyed a strong growth narrative, driven by global expansion and strategic initiatives. While challenges such as high operating expenses and inventory turnover remain, the company’s positive outlook and strategic focus on expansion and optimization suggest a promising future.