Pop Mart, known for its Labubu toys, reported a 23.8% increase in first-half revenue to 17.17 billion yuan ($2.55 billion) for the period ending June 30. However, this growth was uneven, with sales in Asia Pacific excluding China declining by 9.7% and a significant 16.5% drop in the Americas. In contrast, revenue from China surged by 47.3%.
Citi noted that the overall results fell short of expectations, attributing the decline in overseas markets to a 11% year-over-year drop in sales. The bank highlighted that Pop Mart is grappling with various global challenges, including inventory management, supply chain issues, and operational difficulties.
Consequently, Citi has revised its forecast, now anticipating an 8% decline in group revenue for 2026 and adjusting its price target to HK$198. Management has acknowledged that achieving their initial 20% revenue growth target for 2026 will be challenging due to these unforeseen difficulties and increased competition.
Following the announcement, Pop Mart's shares were trading down 3.9% at HK$147.70 ($18.84)