Release Date: March 21, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- MINISO Group Holding Ltd (MNSO, Financial) achieved a significant breakthrough in global market development and brand upgrading, with a net increase of 1,219 stores in 2024.
- The company's global expansion strategy contributed to a 23% overall revenue growth, reaching approximately CNY17 billion.
- MINISO Overseas revenue grew by 42%, with the US market delivering triple-digit compound growth from 2021 to 2024.
- The company achieved a 3.7 percentage point improvement in gross profit margin, reaching 44.9%, driven by effective IP strategy and revenue structure adjustments.
- MINISO's adjusted operating profit increased by 17% in 2024, maintaining a healthy profitability level with an adjusted net profit margin of 16%.
Negative Points
- Same store sales faced slight pressure in 2024, with a low-single digit decline compared to the previous year.
- General sales and administrative expenses increased by 52%, with sales expenses growing by 59% and administrative expenses by 29%.
- The directly operated stores, particularly in the Overseas market, are still in a high growth period and have the lowest gross profit margin among store categories.
- The company faces challenges from global economic uncertainties, including policy changes from US tariffs, requiring diversification of the global supply chain.
- Inventory turnover days increased, particularly in Overseas directly operated markets, indicating potential inefficiencies in inventory management.
Q & A Highlights
Q: How is MINISO planning to improve same-store sales performance in China, given the pressure faced in 2024?
A: Eason Zhang, CFO, mentioned that larger stores tend to perform better, so there is a plan to convert smaller stores into larger ones. Additionally, the introduction of IP LAND stores, which have exceeded expectations, will be a key strategy moving forward. These stores offer immersive experiences and are expected to enhance customer engagement and sales.
Q: What are the expectations for the US market, particularly regarding same-store sales and profitability?
A: Eason Zhang noted that the US market is crucial for MINISO's global strategy, with plans for precise and targeted store openings to improve store quality. Despite current pressures, the company expects triple-digit growth in directly operated stores, with significant room for margin improvement in the mid to long term.
Q: Can you provide insights into the margin outlook for 2025, especially concerning directly operated stores?
A: Eason Zhang stated that while revenue growth is expected to accelerate, profit growth will depend on the performance of directly operated stores. These stores are in a high-growth phase, and while initial margins may be low, there is potential for significant improvement, aiming for a 20% margin in the long run.
Q: What are the plans for store expansion in 2025, both in China and overseas?
A: Guofu Ye, CEO, indicated that the number of new stores in 2025 will be similar to 2024, with a focus on quality over quantity. In the US, the company plans to increase the total number of stores to 350-400, while also expanding in Canada, Southeast Asia, and Europe.
Q: How is MINISO integrating third-party products into its stores, and what impact does this have on sales and margins?
A: The company has introduced third-party beauty products to align with its target demographic and enhance product diversity. This strategy is expected to improve same-store sales and profitability by attracting more customers and increasing the attachment rate of purchases.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
