Miniso, the Chinese homeware and accessories chain, has recently revealed its financial results for the first half of 2025, showcasing a mixed performance in various aspects of its operations. The figures present a clearer picture of the brand’s trajectory and potential areas for future growth or concern.
A Decline in Net Profit
Miniso reported an attributable net profit of 906 million yuan (approximately 108.6 million euros) for the first half of the year. This marks a 22.6% decline compared to the same period last year. Such a decrease raises valid questions for investors and analysts about what factors may be impacting profitability. This decline, while significant, may be contextualized by global economic conditions and increased competition in the homeware sector.
Growth in Revenue
In contrast to its net profit, the company enjoyed robust revenue growth, totaling 9,393 million yuan (around 1,126 million euros), which is an increase of 21.1% compared to the previous year. This disparity between revenue and net profit highlights that while sales are up, costs and expenses are exerting substantial pressure on overall profitability.
Breakdown of Revenue Sources
– Domestic Market: Revenue generated within China saw an 11.4% increase, reaching 5,115 million yuan (613.4 million euros).
– International Markets: Revenue from international markets surged by 21.5%, totaling 3,534 million yuan (423.8 million euros). This indicates a promising expansion strategy beyond China’s borders, reflecting a growing appetite for affordable home goods worldwide.
– Top Toy Brand: The company’s Top Toy brand contributed 742.1 million yuan (89 million euros), indicating its potential for further growth as a significant revenue stream.
Rising Operational Costs
Despite revenue increases, total expenses climbed by 25.3%, amounting to 7,847 million yuan (941 million euros). Understanding the components of these rising costs—such as operational, selling, and administrative expenses—is essential for stakeholder evaluation. It’s noteworthy that these expenses outstripped revenue growth, which can be a red flag if it continues.
Q2 Performance Insights
In the second quarter alone, Miniso recorded a net profit of 489.7 million yuan (58.7 million euros) with a turnover of 4,966 million yuan (595.5 million euros). While the turnover reflects a 16.7% decline, the rise of 23.1% in profitability demonstrates improved operational efficiency or a shift in cost management strategies.
Expansion Strategy
Miniso has cemented its presence globally, with 7,905 stores worldwide—an increase of 842 stores over the past year. The breakdown shows 4,305 stores in mainland China and 3,307 stores internationally, with an additional 293 Top Toy stores. This impressive expansion could bolster the brand’s resilience against fluctuating market conditions.
Leadership Perspective
Ye Guofu, the founder and CEO of Miniso, expressed optimism regarding the company’s performance. His comments on the double-digit improvement in operating profit signal a proactive approach to overcoming financial challenges and lean towards a hopeful outlook for future quarters.
Dividend Announcement
Further illustrating shareholder value, Miniso declared an interim cash dividend of $0.0724 (€0.062) per ordinary share and $0.2896 (€0.25) per American Depositary Share, payable in September. This move aims to reassure investors despite the overall decline in net profit.
Conclusion
Miniso’s latest financial report offers a paradox of robust revenue growth countered by increasing costs and declining net profit. The company’s aggressive international expansion and leadership optimism present opportunities for stakeholders to remain engaged. While challenges persist, Miniso appears well-positioned to navigate through both domestic and global markets in pursuit of long-term sustainability and growth.
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