MINISO Group Holding Reports Q2 2026 Results: Full Earnings Call Transcript

On Friday, MINISO Group Holding (NYSE:MNSO) discussed second-quarter financial results during its earnings call. The full transcript is provided below.

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Summary

MINISO Group Holding reported a 22.4% increase in revenue, reaching RMB 11.5 billion for H1 2026, with EPS growing by 8.2% and operating cash flow rising 46%.

The company highlighted its strategic focus on building proprietary IP, expanding large store formats, and accelerating store renovations, achieving substantial growth in same-store sales.

MINISO's overseas revenue grew by 40.9%, but profitability was impacted by a decline in distributor business and early-stage investments in direct-operated markets.

Management emphasized the success of the proprietary IP strategy, with their first IP, UU, generating nearly RMB 500 million in revenue and achieving significant milestones like the UU × Disney Toy Story 5 collection.

Future guidance indicates high single-digit revenue growth in H2 2026 and mid-double-digit growth for the full year, with a focus on improving overseas operations and refining store models.

Operational highlights include a significant increase in membership contributions to sales, robust performance of large store formats, and successful launch of new proprietary IPs like Chocho.

Management remains optimistic about the long-term growth potential of the proprietary IP strategy and the expansion of large store formats, despite short-term challenges in overseas markets.

Full Transcript

OPERATOR

Hello everyone. Thank you for your patience, and welcome to MINISO 2026 interim earnings results presentation. All participants are currently in listening mode. Following management’s remarks, we will host the Q&A session. Before asking your question, please state your name and the institution you represent. Please note that the event will be recorded. English simultaneous translation is available. For this call, you can select your preferred language by clicking Interpretation in the Zoom meeting.

We released our Q2 and interim results of 2026 earlier today, which are now available on our ir.miniso.com. Joining us here today are our founder and CEO, Mr. Ye Guofu, and our CFO, Mr. Zhang Jingjing. Before we continue, please refer to the Safe Harbor statement in our earnings press release, which also applies to this call as we will be making forward-looking statements. Please also note we will discuss non-IFRS financial measures today, which are explained in our earnings release and our filings to the SEC and the Hong Kong Stock Exchange, and reconciled to the most comparable measures reported under IFRS.

Unless otherwise stated, all figures are in RMB. In addition, we have prepared PPT slides containing financial and operational information for today's call. If you are using Zoom, you can see the information. You can also preview it later on our IR website. Now I would like to welcome Mr. Ye.

Ye Guofu, Founder and CEO

Hello everyone. In H1, MINISO Group revenue reached RMB 11.5 billion, up 22.4%. EPS grew 8.2%, and operating cash flow rose 46%. Our global store count reached 8,674. MINISO today stands at a pivotal moment as we operate larger and better stores, build our own proprietary IP, and develop our overseas organizational capacity. Opportunities and challenges coexist. I firmly believe the strategic direction and the stage-by-stage significance of those initiatives matter far more than the near-term numbers.

I will walk you through our business performance this quarter across three segments, including MINISO China, MINISO Overseas, and TOP TOY. Official data show that China’s total retail sales of consumer goods grew by 1.3% on a year-over-year basis in H1 of this year. Against this macro backdrop, MINISO China H1 revenue grew by 26.2%, not only far outpacing broad retail sales but also exceeding our prior guidance. This was our fastest H1 growth rate in the past three years.

Importantly, the quality of the growth is truly high, driven primarily by mid- and high-single-digit growth on the same-store side. As of the end of Q2 2026, MINISO China store count reached 4,665, with a net addition of 97 stores in H1, among which the Land format store recorded a net addition of 59; flagship format stores, 159; regular stores recorded a net closure of 121. On August 22, MINISO Land’s Chengdu Eastern Suburb Memory store officially opened, marking our 100th Land store in China.

Store count was growing solidly, but the quality is even more important. At the end of June, our China store count was up 8%, while revenue grew by 26%, reflecting a substantial increase in per-store output and healthy growth in overall sales per square meter. I’d like to show you three sets of data. First, on sales per square meter and rent-to-sales ratio, month by month, the Land format store delivers sales per square meter roughly twice that of the regular store.

Compared with existing stores, the stores newly opened in 2026 are significantly larger, yet the sales per square meter held steadily, with rent-to-sales ratio improving the most. Our new store is no longer a mere tenant, but also the engine for foot traffic. Secondly, our store renovation pace continues to accelerate. We completed 189 store renovations in H1; post-renovation, store performance nearly doubled worldwide. Against a full-year renovation target of 355, we have every confidence to exceed it by the end of this year.

Third, franchise returns continue to improve. Whether measured by payback period, profit margin, or proportion of profitable stores, the profitability of the MINISO Land nationwide and MINISO stores nationwide in H1 reached their best levels since 2019. Franchisees are increasingly willing to open larger and better stores, which is the most direct endorsement of our channel strategy. From "swapping the cage for better birds" to large-store-driven growth, our channel upgrade strategy has been underway for two years and remains significant for the future.

This is assessed with two facts. First, the proportion of renovated stores in China remains low, and second, we continue to innovate on store formats. This year we introduced a new member to our store matrix: Super MINISO, the most important innovation of 2026. Looking back at the evolution of our channel upgrades over the past two years: in 2024, MINISO Land validated the IP-immersive flagship store; in 2025, MINISO entered mid- and high-end shopping districts in the affordable luxury tier; in 2026, Super MINISO brings the IP experience to the broader mass consumer base. Its product matrix is 50% IP merchandise plus 50% general lifestyle products. Since its launch, it has become one of the most popular store formats among consumers. The clever aspect of Super MINISO is not to overturn consumers’ existing brand perception; rather, it builds upon it. It retains consumers’ familiarity with MINISO’s value-for-money merchandise while injecting frankness and trend-driven experience through IP.

Other formats like Friends, Land, and Space progressively deepen the IP merchandise and magic share, helping consumers move from lifestyle general merchandise to IP wonderland as part of the brand upgrade. I’d like to say the success of the large store is not merely channel innovation; it’s a systematic innovation of content plus space and operation. The store is a space; IP is the soul to fill it. The momentum of the large store and the value of IP reinforce each other, forming an ever-accelerating flywheel.

In June last year, we launched UU, our first proprietary IP. Within just one year, UU has entered into 53 countries worldwide, generating nearly RMB 500 million in related revenue in H1. The most iconic milestone was UU × Disney Toy Story 5 collection. UU versions of Woody, Buzz Lightyear, and Slinky Dog sold strongly across stores in multiple countries. In just one year, UU’s success has propelled our proprietary IP to a new stage where it can engage top-tier global IPs as an equal.

Beyond the MINISO flagship store and brand, TOP TOY has also built its own IP matrix. Its flagship IP Nomi has surpassed RMB 300 million in cumulative GMV. You can see that while UU validated the methodology within our flagship brand, Nomi, Yui, and Duidui have proven different styles under the TOP TOY Land brand. Around proprietary IP, we have accumulated a full-chain SOP spanning artist signing, product definition, design to development, supply chain scheduling, all the way to pre-launch staging, debug, channel in-store events, and fan operation.

Our group-wide target of RMB 1 billion in proprietary IP sales, set at the beginning of this year, was achieved ahead of schedule by the end of July. This all proves our multi-IP, multi-category globalization strategy is successful. They fully demonstrate MINISO’s unique resource endowment. In building proprietary IP, we have full category coverage, all-channel penetration, a global footprint, and full-chain operation. Looking across the globe, MINISO possesses the greatest flexibility and expandability in product categories, strong cost control and innovation capacity in channels, and the broadest and highest-quality global store network in terms of footprint. On the operation front, MINISO leverages full-chain advantages from signing artists to design, development, marketing, and selling products. We deeply empower artists at every stage, maximizing the potential of each IP. Those are precisely MINISO’s highly differentiated and scarce resources, and they are also the key to MINISO’s leap-forward development. In proprietary IP, there are four "forces" enabling us to complete the entire process from IP concept to shelf more efficiently than the vast majority of companies.

So everyone, UU is just at the beginning. On August 22nd, we newly launched artist IP Chocho, which sold out entirely on its debut day, far exceeding expectation. We have already signed multiple designer toy artists. You can see that on the evening of the 26th, 50,000 sets of Chocho were sold live within one second. At the same time, we have already signed multiple designer toy artists, recruiting top creative talents worldwide through our IP Protégé program.

Our ambition going forward is to lead 100 Chinese IPs onto the global stage. At the moment, the global IP market has entered an unprecedented boom. The rise of a great nation is inevitably accompanied by the birth of cultural symbols and their global ascent. MINISO, backed by our world-leading channel, product, and IP operation, will secure our top position in this historical moment. Our vision is to become the world’s leading IP operating platform.

Measured by channel scale, we are already the world’s largest retailer of IP products, and our proprietary IP business is building a new growth engine that is at once distinctive, explosive, and replicable. Our strategic pivot towards proprietary IP is a long-term choice grounded in the trend of our era. We will sustain long-term investment. Even in the short term, the proprietary IP product line has delivered an excellent report card. Not only has UU proven to be a success, the same as Chocho, our second IP; in H1, its profit margin was above the company average. Inventory turnover was kept within 30 to 40 days. The proprietary IP strategy has placed no pressure on overall profitability, laying a solid foundation to continue our IP ecosystem. Coming next, I’m going to talk about our membership strategy. Last year I said membership would become another important engine for MINISO’s growth. The value of the membership strategy is steadily materializing.

Member scale and contribution continue to reach new levels. In H1, our China membership grew by 31%, reaching 130 million, an all-time high. Member-contributed sales rose from 57% in the same period last year to 60% for the full year last year, 63% in Q1, and further to 77% now. At the same time, membership is the latest evidence of MINISO’s growth shifting from opportunity-driven to system-driven. The value of membership is manifested in two sides.

The core engine is lifting average transaction value. Average transaction value rose by 5%. Working with global IPs, for example Sanrio, Disney, and Harry Potter, as well as Chocho, combined with the blockbuster effect of our proprietary IP, large stores have become the core stronghold of high-value members. As a result, per-customer contribution of China members was two times higher than non-members. Average transaction value of IP members is more than three times that of non-IP members.

Secondly, membership is the top-level engine to improve retention through precise targeting and benefit-driven retention that can further extend active lifetime. Precise identification of member consumption preferences and category needs enables new products to reach target consumers efficiently, while upgraded benefits such as cashback credits turn one purchase into direct momentum for the next purchase. IP members newly acquired in 2025 saw a retention rate in H1 that was 8 percentage points higher than non-IP members, with purchase frequency two times higher than non-IP members.

Members who use cashback credits repurchase 1.6 times more frequently than those who don’t. IP-driven acquisition, large-store quality upgrades, and repurchase extension is our underlying formula to achieve highly sustainable membership value. When we have scale, structure, and frequency driving together, they will be able to sustain long-term success. Let’s also take a look at the overseas market. In H1 of this year, overseas revenue grew by 40.9% to RMB 4.06 billion.

Store number reached 3,644. Frankly speaking, overseas performance fell short of our expectation and weighed somewhat on our group profit. The overseas contribution to company profit declined from 35% to 40% in 2023 to 10% to 15% in H1 of this year. The impacts came from two factors: first, a decline in distributor business revenue; and secondly, our direct-operated markets outside North America still remain in the early investment stage. The store models are still in refinement and not yet profitable.

We also made some internal review of those issues. Expanding our overseas directly operated stores, we will be more focused and more prudent, vigorously assessing ROI of new stores, concentrating resources to deepen our presence in priority markets. I asked the teams to slow down the pace of store openings unless you have 100% confidence. In H2, we will first concentrate on operating our existing 800 overseas directly operated stores and replicate after a single-store model materializes.

The overseas market is our vast horizon. Short-term fluctuations won’t change our long-term growth trends. We have corrected our past growth approach that overemphasized shipments and store count so that terminal sales growth, inventory turnover, and headquarter shipment once again would form a closed loop in a healthy way. Now it is also the time for us to really improve performance in overseas markets. Our overseas business is now in the holding stage.

We need to refine our store model and, more importantly, ensure the China transformation will be successfully validated in international markets. It’s time for another upgrade for the international market. We have already made significant adjustments and transformation. So I would like to take this opportunity to encourage our overseas teams. From 2015 to now, our overseas journey has spanned 11 years. The deeper we go overseas, the more profoundly I realize how difficult it is for a Chinese company to truly gain a solid foothold and earn sustainable profit abroad.

It is not only product strength and supply chain; it is also organizational capacity, management control model, and localization strategy. MINISO’s overseas business has been profitable from day one. Yet we must recognize the overseas challenges today are precisely a sign that MINISO globalization has entered the deep-water stage. As the share of direct-operated business rises, we must settle again and pursue refined operation, localization, stronger organizational capacity, and a globalized management control model.

While solidifying our management fundamentals, we see many international consumer brands that entered China did well in the past decade but started incurring losses in recent years. So no matter whether international brands come to China or Chinese brands go to international markets, we have to be adaptive; otherwise, profit would be nothing to talk about. This is also the so-called secondary upgrading and transformation every company needs to face if they go for internationalization.

MINISO’s China transformation over the past few years achieved great success. We have preliminarily realized brand upgrade and business model iteration. China business has started to burst with fresh vitality. The challenge we are facing for the overseas business today is essentially the same as China three years ago: shifting from scale-first to quality-first. Over the past three years, China delivered its transformation report card—from land-grab expansion to wonderland-style upgrade and then to refined operation.

This methodology applies equally to the overseas market. We are never short of product, supply chain, or channel. What we lack is more patience to fully refine the single-store model. Going global is a marathon. Every adjustment and every investment we make today lays a solid foundation for long-term value. Every additional good store MINISO opens overseas, every additional consumer well served, every additional member accumulated brings us one step closer to our vision of becoming the world’s leading IP operating platform.

I have faith in my overseas team. Give them time, give them patience. I believe that the overseas market tomorrow will surely be better than what we have today. Coming next, please allow me to talk about TOP TOY. In H1, TOP TOY revenue grew by 32.7%; global store number reached 365, including 48 overseas. This quarter, TOP TOY’s first US store opened in Times Square, New York, making it the first Chinese designer toy brand to enter the crossroads of the world.

In H1, proprietary IP accounted for 10% of TOP TOY sales. With the proprietary IP matrix continuing to expand, we have some pop-up events that are quite popular, especially UU in Hangzhou; a single-month GMV already exceeded RMB 50 million. Coming next, I’m going to welcome Eason to walk you through the financials in H1 of this year. Please.

Eason Zhang, CFO

Okay, thanks to Mr. Ye. Now I will walk you through our key financial metrics today. Rather than going through the financials line by line, I will offer some explanation on several data points that are top of mind for you. First of all, let’s review how we performed against the H1 2026 guidance we gave you in the May earnings call. H1 revenue grew by 22.4%, slightly ahead of our guidance of 20% to 22%. China revenue grew by 26.2% in H1, with Q2 in particular growing by 23% versus our earlier expectation of only low-double-digit growth in China for Q2.

This upside in China came from two factors: first, an accelerated channel upgrade—China saw a net addition of 25 stores in Q1 but 72 in Q2, far exceeding our projection of around 40—and secondly, sales contribution from proprietary IP, especially UU. China same-store sales also achieved the guided mid-single-digit growth. As Mr. Ye has already mentioned, in the short run our proprietary IP delivered excellent results. The profit of our proprietary IP products is higher than the company average, and inventory turnover has been controlled within 30 to 40 days.

But for sure, 30 to 40 days may still be short of supply now while improving. So in that way, proprietary IP is not a pressure on our overall financials. Overseas revenue grew 15% in H1, below our guidance of high double-digit growth. The main reason was a 10% decline in distributor business revenue, and both Asia and Latin America markets experienced temporary revenue declines. As I have already shared with you, North American mid-single-digit same-store sales growth came in below our prior guidance of high-single to low-double digits, largely because we saw weakening of same-store performance in North America in June.

Adjusted operating profit excluding FX gains and losses rose by 5% year over year, slightly below our earlier projection of high-single-digit growth, mainly due to the decline in distributor revenue, a high-margin part of our business. In H1, MINISO overseas terminal GMV grew by 40% year over year to RMB 8.29 billion. Revenue grew by 50%, reaching RMB 4.06 billion. Let me break it down by region. Asia: In H1, Asia terminal GMV grew by low single digits year over year, while revenue declined low single digits year over year.

Markets such as Indonesia, India, and the Philippines were the main drivers weakening Asia’s overall performance. Objectively speaking, those markets are facing macro challenges, but it is undeniable that our localized operating capacity still has room to improve. Our localized understanding of market shifts and product–channel matching are not deep enough. Our merchandise planning, channel strategy, and terminal execution are not as efficient as what we have achieved in China.

At the same time, we proactively cleaned up a batch of underperforming, low-efficiency stores. For example, in markets such as the Philippines, we closed stores with outdated formats and persistently weak output, which had some short-term impact on revenue. This cleanup of low-efficiency stores in overseas distributor markets will continue for another two quarters. We can also see that for a market like Vietnam, following an earlier phase of higher-end store closures and product mix adjustment, it already started to show improvement in H1 of this year.

Its efficiency continued to improve to the best in the past three years. Vietnam same-store sales grew by 20% in Q2 with continued positive growth momentum. This shows our future direction is correct. Going forward, we will continue to deepen our understanding of Asian markets, enhancing our localized operating capacities in a market-specific manner, focusing on channel upgrades and product mix adjustment. We will actively explore product assortments and price bands adapted to changes in local consumption.

Latin America: In H1, Latin America terminal GMV grew by high single digits year over year, but revenue declined by low double digits year over year. There were several reasons for this divergence. For example, a number of core markets including Colombia faced multiple external challenges such as political volatility, rising freight costs, and natural disasters, which had a fixed impact on overseas ordering and shipments. However, terminal demand remains resilient.

The top four Latin American countries, which contribute 80% of our performance there, all delivered solid terminal GMV growth in H1, with Mexico also posting high single-digit growth excluding FX impact; actually, in local currency, Mexico terminal GMV grew by nearly 20%. As external disruptions fade away, we have confidence in long-term development. North America: In H1, North America revenue grew by 37%, reaching close to RMB 1.8 billion, broadly in line with our expectation, with mid-single-digit same-store growth.

By quarter, Q2 revenue growth moderated slightly to 25%, while the two-year CAGR held around 50%. The moderation was mainly due to three factors. First, a temporary gap in the cadence of IP product launches: North America has a high share of IP products and is therefore more sensitive to IP launch cadence. In H1, we didn’t maintain a sufficiently steady launch frequency, which affected store traffic and conversion to a certain extent. This provides a valuable lesson for optimizing our IP product staging going forward.

Secondly, the sales share of locally direct-sourced products in the US market used to exceed 50%, but was not fully in line with our plan at the start of this year. Against the backdrop of tariff policy changes, we set out to control and gradually reduce the share of overseas direct sourcing—focusing direct sourcing on categories not operated by headquarters. However, it takes time to adjust the product matrix, which was not reflected in H1. Going forward, we will further improve the advance planning of overseas merchandise.

Thirdly, the upfront cost investment for newly directly operated stores: we had a net increase of 75 stores in H1, nearly double the same period last year. The upfront investment has some short-term impact on profitability. The good news is that the new stores opened this year deliver significantly higher profit margin and sales per square meter than older ones, outperforming in site selection quality and channel matching. Entering H2, we will shift our focus to deepen store operations and run our already opened stores through-and-through.

For the full year, North America and Europe will still maintain relatively high growth. As for North America stores, we will continue to improve success rates. We expect North America will reach close to RMB 4 billion in scale with 10% net margin for the full year. Europe is also a market where we are positive, but it is still in the early stage for direct operation development, so fluctuation is expected. In H1, Europe revenue growth moderated to 26%, with same-store sales down by mid-single digits.

Our European team is building organizational capacity and a refined store model. Let’s give them confidence and patience to allow the market to prove our strategy. In H1 2026, MINISO mainland China achieved mid-high mid-single-digit same-store growth, in line with our expectation, leaving ample room for our full-year target of low-single-digit same-store growth. MINISO overseas same-store sales declined low single digits, with North America achieving mid-single-digit same-store growth.

North America’s same-store performance was quite strong in Q1, growing by 10%, but moderated in Q2, particularly because of stock-outs of certain best sellers, especially best-selling IP products. We expect this stock-out to be eased in September. In H1 2026, the gross profit margin was 44.3%, flat versus the same period last year, including approximately 0.6 percentage points from US tariff refunds. For Q2, the GP margin was 45.3%, a 1 percentage point improvement compared with last year, due to tariff refunds which brought 1.2 percentage points of positive impact.

Based upon the refunds received to date, the company expects tariff refunds will also provide 20bps to 30bps support to overall GP margin for the next two quarters. Excluding external investments and convertible bonds financing, the profitability of our core business in H1 was as follows. Adjusted operating profit was RMB 1.49 billion versus RMB 1.59 billion in H1 last year, down 6%. Excluding FX effects, the figures were RMB 1.63 billion and RMB 1.55 billion, up 5%.

Excluding FX effects, adjusted net profit was RMB 1.22 billion versus RMB 1.24 billion, down 1.7%. The corresponding adjusted net margin declined by 2.6 percentage points year over year, also reflecting that our selling expense ratio rose 2.7 percentage points this period versus last year, to 25.8% from 23.1%. To be specific, rental and depreciation expenses related to directly operated stores rose from 7.1% of revenue in the same period last year to 8.1% in H1 this year, up 1 percentage point.

Advertising and promotion expense grew by 0.2 percentage points, while IP licensing fees rose from 2.6% in H1 last year to 3.1% in H1 this year, up 0.5 percentage points. The increase in these two items largely reflects our strategic investment in proprietary IP. Selling-related labor costs rose from 6.8% last year to 7.2% this year, up 0.4 percentage points. Altogether, the growth of the above four expenses contributed to 2.6 percentage points of the expense increase.

By business unit, the main reason for the year-over-year margin decline was a structural shift in revenue. In H1 2026, the revenue contribution from high-margin franchise and distributor business—where net profit margin was more than 30%—fell by 6 percentage points, while the contribution from overseas directly operated business rose by 3 percentage points; however, last year this segment had a single-digit loss margin. Working capital: Inventory turnover in H1 was 102 days versus 97 days in the same period last year.

MINISO China inventory turnover was 67 days versus 73 days last year. MINISO Overseas inventory turnover for international markets was 273 days versus 240 days last year. Going forward, our overseas business must prioritize inventory health and take decisive measures to react and support inventory. Besides that, in peak seasons we have to leverage IP launches and holidays, coordinating membership promotion and gifting activities to use blockbuster products to drive monetization of slow-moving inventory.

At the end of June, our cash reserve was RMB 7.39 billion. Net cash inflow from operating activities in H1 was RMB 1.48 billion, up 45.5%. We constantly place high priority on cash flow management. This robust level also provides solid support for the company’s transformation and shareholder return. In H1 2026, the company returned RMB 1.31 billion to shareholders, including dividends and buybacks, of which the company repurchased RMB 520 million.

Combined with Mr. Ye’s personal share purchase of approximately RMB 54 million in H1, our buyback scale in H1 already exceeded the full-year total of 2025, which fully demonstrates confidence in future business. We did not declare any interim dividend this time because the company believes the current valuation is highly attractive; we will conduct substantial buybacks over the coming period and make a reasonable dividend decision by the end of this year based upon full-year profit.

The company’s shareholder return policy for this year is buybacks plus dividends of no less than 50% of adjusted net profit excluding FX effects. Looking back on H1, our domestic business exceeded expectations once again, validating that our path—opening large stores, building IP, and pursuing high-quality development—works. Overseas markets sustained a compound growth rate of nearly 40%. Now we are in a transition period from scale expansion to quality upgrade.

We still need time to build up organizational capacity. Based upon the company’s current projection, we expect company revenue to grow by high single digits year over year in H2, and mid-double digits for the full year. In H2, MINISO China revenue is expected to grow by mid-double digits year over year, but overseas revenue will grow by low single digits. Overseas distributor revenue is expected to decline by low double digits; overseas directly operated business will grow low double digits.

TOP TOY revenue is expected to be flat in H2, with low double-digit growth for the full year. Compared with our full-year outlook at the start of this year, both domestic revenue and profit are somewhat better, with the differences mainly coming from overseas and TOP TOY. In H2, we’re proactively slowing down overseas, continuing to close a batch of low-efficiency distributor stores and controlling the pace of directly operated store openings. We expect a net reduction of 50 to 70 stores across overseas markets in H2, a net addition of 40 to 50 directly operated stores, and a net reduction of 100 to 110 distributor stores for the full year.

Our guidance for low-single-digit same-store growth for MINISO China and MINISO North America remains unchanged. Excluding FX, adjusted operating profit is expected to decline by high single digits year over year. Adjusted operating profit margin is expected to decline 3 to 4 percentage points year over year. Our profit outlook is more cautious than the guidance we gave at the start of this year, when we expected accelerated full-year profit growth versus last year with an implied margin assumption of a 1 to 2 percentage point decline.

However, we now believe it’s going to be down by 3 to 4 percentage points, given that overseas distributor market revenue will decline over the next two quarters, which will impact our margin. This concludes my remarks. Now let’s move to the Q&A session.

OPERATOR

Thank you, ladies and gentlemen. Please rename yourself as your name plus the institution you represent. Please make sure you limit your question to just one. Now, let’s welcome Michelle from Goldman Sachs, please.

Michelle, Analyst at Goldman Sachs

Hello Mr. Ye and Eason. Thanks for giving me the chance to raise a question. I have a question regarding your large store format in mainland China. Mr. Ye has already mentioned the large store was performing above expectation. We know that for many large stores, when they first open, the performance is pretty strong. After the opening dividend or first-store impact is gradually digested, what would be the normal performance of those large stores?

Especially compared with normal stores, what would be the difference in sales efficiency and sales per square meter? Whether you have any target in mind, and do you have any criteria in selecting the regions or the sites for those large stores? The question is mainly regarding the large store format. Thank you.

Ye Guofu, Founder and CEO

Thank you. Let me start with my overall view. The large-store model continues to outperform company expectations. Our first large stores have been open for two years; this is not a short-term action. At the same time we have multiple large stores; it’s not just one or two. From this perspective, it’s not a short-lived burst driven by opening hype; it is a sustained growth trend. Our store matrix keeps evolving, and now we have Park format, flagship, regular, and pop-up.

Let me break down the large-store unit model with a few metrics on store performance. The Park format family is very healthy. MINISO Land, our earliest format in this family, still delivers store performance above the RMB 3 million baseline, while Super MINISO, newly launched in 2026, has already surprised us and can basically hold steadily above the RMB 1 million baseline. On sales per square meter, the Park format runs at roughly twice that of regular stores.

On rent-to-sales ratio, the Park format runs slightly higher than regular stores by a single-digit number, but the trend is downward thanks to better terms after talking to the malls. On paybacks, the Park format store achieved payback within six months in the early stage, and now on average around one year, faster than the 60 to 80 months of regular stores. Franchisee profit margin and share of profitable stores have risen in tandem. In H1, the profitability of MINISO stores nationwide reached its best level since 2019.

In H1, more than 30 Land format stores entered into the same-store base, with average daily sales per store up to 30% growth worldwide. Among flagship format stores, 400 stores saw average daily sales per store growing mid- to double-digit year over year. On site selection, we will stick to quality over speed. The share of large stores and flagship stores will keep rising. Based upon our analysis, MINISO China total store number would reach 7,000 to 8,000: Land format family would be 1,200 with 950 Super MINISO and MINISO Friends; flagship format would reach 2,000; regular format 4,500. On site selection, location value and traffic will always be our key criteria. We look at the commercial district and prioritize top-traffic, prime commercial areas. For example, we look at store structure and prioritize corner positions and street-facing fronts. Certainly, we look at consumer circulation, making sure the store is set right on the main customer traffic corridor. Thank you.

OPERATOR

Thank you. Now let’s welcome Yang Renbo from CICC, please.

Yang Renbo, Analyst at CICC

Hello, Eason and Mr. Ye. I have a question. In H1, MINISO China’s performance was truly ideal. However, the domestic retail environment in China was volatile in July to August; some retail companies said they are under pressure. Can you share the consumption trends you are seeing in the market and how the company is going to respond with concrete measures? Thank you.

Ye Guofu, Founder and CEO

This is a very good question. According to data from the National Bureau of Statistics, as many of you can see, in June growth declined and in July it was only up 0.6%, which is not ideal at all. But for MINISO China we remain strong. Since July, MINISO China GMV has grown about 20% year over year, driven by both rising shares of large stores in our store mix and steady same-store development. In July, same-store average daily sales grew by mid-single digits.

At this point we say MINISO China will have mid-double-digit revenue growth in H2. Those results are inseparable from our strategies mentioned—people, product, and stores. First, even if social retail is going down, for traditional retail business you need the consumer to work, but you see that for emotional sales the sales are going up. For example, outdoor products and trendy toys are growing fast, but traditional retail is not growing that fast.

That’s the reason we have to continue to build our MINISO Land, because we are building immersive IP themes—that is the future trend. On people, membership operations are a key growth lever for us, especially building out the cashback membership system. We shared progress on the membership program during the earnings call, including growth in membership numbers and membership contribution to sales. We need refined operation of the store. On product, our product mix is now truly aligned with IP.

For example, our proprietary IP can provide interest-driven products with emotional value. Those product sales are growing very fast. Especially in H1 this year, proprietary IP led by UU became a notable incremental driver, with the designer toy category. Proprietary IP now already has a mid-single-digit share of offline sales and a double-digit share of online sales, growing very fast—especially in top-tier stores such as MINISO Land and MINISO Space.

In the Genie collaboration, we have been deliberately pushing into higher price bands to test more prime merchandise, and we are going to have the first LISA-branded pop-up store starting from the 1st of September. Many international celebrities and superstars are happy to work with MINISO and help us continue to build the interest-driven consumption market in China. The economy is not great, but China’s population is still huge. China has 1.4 billion people.

Generation Z and people born in the 1980s and 1990s are still a big proportion. Those people are never short of material consumption; they need emotional value and interest consumption. Our competitors are also growing very fast, which showcases China has huge potential to go further. In terms of channel, I was talking about the strategy of upgrading store quality, which will provide ample room for sustainable development of our domestic business in the coming years.

Upholding the principle of quality over quantity, our domestic business is still in a fairly ideal state. We will keep advancing renovation of existing stores. I have already highlighted that MINISO China’s 4,665 stores span a variety of formats. We’re going to do upgrades for lower-tier stores. Young people in China all need interest-driven consumption with emotional value. If we build good store scenarios and immersive experiences, our trendy toy and IP products are more attractive.

That can help us continue to improve consumption and move the price band further. I was just back from the northeast part of China. I see many stores well positioned. Our store efficiency is no less than our competitors. Some of our stores can even outperform Pop Mart. That is our internal goal. If you have time, I’d suggest you look at our stores at the Harbin Parkson shopping mall. We have two stores there facing each other; our performance outperformed Pop Mart at Harbin Parkson, which boosts our great confidence in larger stores.

Internally, we propose to improve sales per square meter over competitors. We have every confidence to make this happen. Our trendy toy product share in Land is more than 35%, and we’re going to make it more than 40%. We already have two proprietary IPs, including UU and Chocho. Chocho was just announced two days ago. If Chocho proves successful, then we’ll have two proprietary IPs with annual sales of more than RMB 1 billion. If we hit this target, then our diversified formats plus proprietary IP will be a 50% performance driver from trendy toys, IP collaboration products for another half.

In that way, our business model will be more stable, sustainable, immersive, and experiential. A majority of our stores are more than 800 square meters, including two floors. So I have every confidence in our large-store format, especially Land. Even if we are facing challenges now, I truly believe we are still in the pen stage of the transformation. Profit has been under pressure; however, we have a promising future, and I believe the business model, while running, still makes us feel excited.

That’s for the domestic market. For the international market, we are facing many problems. Starting from H2, I will spend more time working on the international market. In H1 we were working on store format refinement in China. In H2 this year, we’re going to move that to the international market. In Mexico, from the 10th to 15th of September, we’re going to also have the MINISO Land format. Problems we addressed in China also exist in the international market, and in Mexico we’re going to celebrate the anniversary.

The Latin American consumer preferences are similar to those of China. Income, population structure, and density are close. It’s also time for them to embrace transformation in operations. As I believe, interest-driven consumption and emotional value will be the next drivers for future growth. We probably don’t need too much material value—only in some African countries there is still great need for material value. However, in developing countries like China and ASEAN, we will shift from material value to emotional value and interest-based consumption.

Thank you.

OPERATOR

Thank you. Coming next, let’s welcome Annie from Jefferies. The line is open, please.

Annie, Analyst at Jefferies

Hello Mr. Ye and Eason and the IR team. I have a question about the latest performance. What are the latest same-store sales figures for July and August? Has weather been a factor? Could you split same-store sales into average selling price and traffic? How much have store upgrades, renovation, and product mix shift contributed to the growth? Which product categories are performing best? Given the soft retail and last year’s high base, what’s your outlook for same-store sales in H2 of 2026?

Is there any difference between higher-tier and lower-tier cities? Thank you.

Ye Guofu, Founder and CEO

In July and August, MINISO China same-store performance was very steady, beyond our expectation—especially with Super MINISO, where performance is quite competitive. Breaking it down on order value and volume contribution: average transaction value grew by about 20%, and volume and price are both rising, which is very healthy. We also mentioned we’re going to have a higher consumer unit price and higher gross margin; this has not fully started yet.

We actually opened more high-end stores in the MixC as well as the Taikoo shopping malls, and the products are still in the refining stage and need to be further improved. Same-store growth is driven by multiple engines, including store upgrades and product upgrades along with memberships. Upgrades are not the sole source—within mid-single-digit same-store growth, store renovation contributed roughly low single digits. The rest came from better refined operations, including optimizing product–channel matching, making sure the right product is in the right channel, and tailoring the product mix to different store styles or types.

We have more high-end stores, but we still need to improve our product. Product adjustments take time, but that’s different from store adjustments. For store adjustments we’re building the infrastructure right; then we’ll count on our product to continue to grow. We have our proprietary products along with accelerated development of the product mix. For large-store models and designer toys, penetration in tier-1 and tier-2 cities is higher; in lower-tier cities it is still very low. This means lower-tier cities offer broad room for expansion and are a potential source of future same-store growth. On category performance, big toys are one of our best-performing categories, with share of total sales up by 1 percentage point. On IP share, IP products overall accounted for around one quarter of sales; the share from proprietary IP and artist IP rose by 4 percentage points. On H2 outlook, we face a high base stemming from the Zuntopia craze in November and December last year, and we also have a decent IP lineup for the same period this year.

Generally speaking, with same-store sales growing mid-single digits year to date, we remain confident in delivering full-year low-single-digit same-store growth in China and mid-double-digit revenue growth in H2. We also see several important levers: first, keep optimizing low-efficiency stores; second, on the product front, back-to-school season is a key focus—we did not do particularly well last year and will make sure we capture it this year, seizing opportunities for cultural-creative categories; third, on holidays, we will capture the sales surge window around National Day and Mid-Autumn Festival; fourth, strengthen repurchase and mind share through the membership cashback credit mechanism.

OPERATOR

Thank you, Mr. Ye. Next question, let’s welcome Shi Di from Huatai Securities, please.

Shi Di, Analyst at Huatai Securities

Good evening, and thanks for the clear guidance. In H1 this year the company had many new IPs and products—for example, the collaboration with Genie—which generated a strong buzz. Your proprietary IPs Chocho and UU are also performing very well. What IP types and category expansion are planned for H2? What are the levers for creating blockbusters in H2? Any holiday season plans in your pipeline?

Ye Guofu, Founder and CEO

Our IP strategy remains driven by two engines: licensed IP and proprietary IP. Each has its own plans. For licensed IP, we have partnered with 180 global IPs spanning film, TV, and celebrity IPs, accumulating end-to-end experience from IP selection to product development to operation. On the Genie collaboration, our products—such as accessories, blind boxes, and plush—cover about 70 SKUs. From the 1st of September those products will be available.

We also have more IPs in the pipeline. At the same time, Chocho has just started to release its great potential. Demand far exceeds expectations. We never expected it to be that popular at the very beginning. It is performing very well on Xiaohongshu. On the 12th of September, we will officially launch our collaboration with LISA in Thailand. On the 9th of September, we’re going to have the LISA collaboration IP exhibition. You all know how impactful LISA might be.

We’re going to be the IP collaborator and IP extension worldwide. We have products including blind boxes and plush, and pricing will be friendly to normal consumers. Gross margin contribution is also reaching the best level, and we continue to improve product and pricing with a global layout. Regarding proprietary IP, that is our long-term strategic lever. We will work hand-in-hand with the large-store format. As I mentioned, UU’s sales in June and July were more than RMB 100 million for two consecutive months.

UU will have a major IP collaboration later, going beyond Disney. UU also has collaborations with McDonald’s and Luckin Coffee; you can see those advertisements on Xiaohongshu. Many consumer brands want to work with us on UU. The success of Chocho again proves our proprietary IP model is successful and feasible. Our team is getting more confident. One success could be luck, but two successes are not luck at all—you need methodology and a mature strategy.

We’re also working with different celebrities, especially our collaboration with Li Yuchun, which is very well established and a global-leading strategy. We are learning, but we are surpassing—that is the great strategy of my team, working to launch better marketing innovation in the near future, going beyond peers and surprising the industry, society, and consumers. This also clarifies that our commercial proprietary IP is progressing from stage to stage to a more mature phase.

To summarize, we have a few levers: we will continue to work with top licensed IP and celebrity IP, and insist on incubating our proprietary IP. With our existing IP matrix, we will have IP and product working together across categories and SKUs, leveraging our large stores and different formats to convert IP sales and advance proprietary IP. You can come to our stores to see that for Disney and UU we now have blind boxes working together, and for Chocho the blind box is also well created and very professional.

Our blind box capability is making huge progress. With good use cases and IP, when consumers come to our store and feel we are professional—especially after working with Li Yuchun—we believe MINISO’s trendy toy consumer measure will continue to progress. That could also help build future collaborations and be a great driver for our future growth. That’s all from me. Thank you.

OPERATOR

Thank you. Next question, Samuel from UBS, please.

Samuel, Analyst at UBS

Thank you, Mr. Ye and Eason. I have a question regarding the US market. You proposed a target for RMB 4 billion revenue and RMB 400 million profit for North America. But in Q2 we see sales somewhat slowed down. How are you going to complete this target—what are the drivers? And regarding profit, how are you going to improve profitability?

Ye Guofu, Founder and CEO

Thank you very much. Internally we look at the US and Canada as a whole. For North America, our performance target is RMB 4 billion revenue with 10% net profit margin. Excluding short-term data, if you look at the US only, MINISO was the fastest-growing retailer in the US in 2025; it was covered by Forbes. Converting our results from indirect to direct, the US business posted a CAGR of 120% from 2022 to 2025. For same-store performance, we aim to maintain a two-year target of low-single-digit growth, which is in line with our expectation.

Improving US margin still depends on operating leverage and optimizing store numbers. Over the past two years we opened some stores with large foot traffic; now we will slow down a little and focus on improving both profit and revenue as a whole.

OPERATOR

Next question coming from CITIC, please.

Analyst at CITIC

Hello. In H1 this year, you mentioned opening stores ahead of peak season and operating the business for scale. You are quite confident. What is your expenses planning outlook for H2 this year? Will investments be accelerated? Thank you.

Eason Zhang, CFO

A few numbers: in H1 this year in North America, net store additions were 75. In other words, we really wanted to make sure stores were opened before the peak season to accelerate growth. For the full year, sales and profit seasonality is very typical for North American retailers—we don’t make much money in H1; we count on H2, especially Q4, to drive overall sales and profit. In my prepared remarks, I showed a slide on by-business profit rate: in 2025, franchise and agent business net margins were around 30%, which aligns with the seasonality and mix.

Looking into H2 this year, we expect profit will continue to steadily increase. International agency remains stable. For direct sales, we split into two parts: North America direct sales, where net margin target is around 10%, and the direct sales businesses still in growth stage—Europe, Australia, and ASEAN—where we will continue to optimize. In H1 this year, US back-office expense ratio decreased slightly; profit margin will continue to grow. At the same time, at the group level we expect adjusted operating profit margin to decline by 3 to 4 percentage points year over year for 2026. We hope that 2027 will be the turning point for profit margin improvement.

OPERATOR

Thank you. Next question coming from Qin Yang from Changjiang Securities.

Qin Yang, Analyst at Changjiang Securities

Thanks for the opportunity. I have a question regarding your US business. For US merchandise strategy, you mentioned adjusting the product mix. What will be the key focus in H2 of this year and next year? How do you balance headquarters-directed versus locally direct-sourced products?

Eason Zhang, CFO

Refining the product mix is continuous work, particularly amid micro policy changes. We constantly adjust our overseas product mix. In terms of sales contribution, designer toys remain our largest category in the US, contributing over one third of sales, with plush performing especially well—largely built on licensed IP. We plan to re-launch proprietary IP next, which should contribute incremental growth. In Q2, some best-selling IP products were out of stock due to merchandise planning; we bridged the sales gap through rapid direct sourcing. As a result, due to planning, some SKUs were out of stock, but that is not our goal. We will continue to differentiate the product. In the US, the share of headquarters-directed products declined from 60%–70% in early 2024 to close to 40% in H1, while the share of direct-sourced products rose considerably. Among those direct-sourced SKUs, conversion and attachment rates in store have significantly improved.

While the US is under pressure and we are adjusting the product mix and slowing store openings, our headquarters is making significant investment in the merchandise center. Regarding GP margin, the US market gross margin was around 65% to 70%, partly due to tariff rebates, which will also give us positive contribution in H2. The asset turnover ratio is well under control. With the launch of blockbuster IP and increased proportion of IP, we believe US GP margin will increase in H2.

OPERATOR

Thank you, Mr. Ye. Next question, Wu Chenxi, please.

Wu Chenxi, Analyst

Thank you. As you mentioned, the distributor operation is still facing some resilience. What is the company’s outlook and plan for distributor market growth?

Eason Zhang, CFO

Thank you. In H1 this year, distributors slowed their restocking; revenue slowed. Looking into H2 in Asia, distributor revenue will still be down about 10%. Negative revenue growth doesn’t necessarily mean end demand is problematic. For the full year of 2025, overall sales of the distributor business were more than RMB 10 billion; the CAGR was more than 10%, which is robust. Excluding FX, terminal GMV still maintained high single-digit growth in H1.

We see a gap where some channels are digesting inventory; in that process, distributor restocking lags their own sell-through—a normal phenomenon. Externally, some markets in the Middle East and Asia were affected by geopolitical conflict, currency swings, and other macro factors. Inventory turnover in those markets came under pressure in H1. Latin America also faced macro, currency, and natural disaster headwinds, but its inventory turnover improved.

We operate in 80 distributor markets overseas, with the top 80 accounting for 80% of overall business. In H1, inventory turnover in the top 80 markets was roughly flat versus last year and somewhat better than the directly operated markets overall. Broadly speaking, internally we have candidly acknowledged that we want to maintain long-term channel health rather than pushing inventory for short-term results. Terminal sales will be normalized, and at the same time we will reduce store numbers in certain markets.

For example, in New Zealand and the Philippines we closed some low-efficiency stores. Due to channel issues, we made strategic decisions to close some low-efficiency stores. In H2, we expect another 100 to 110 net closures for the year across distributor markets. This decision brings short-term pressure on distributor revenue; however, in the long run it ensures healthy and sustainable development of the entire ecosystem. Latin America is a key region.

Local distributors have strong backgrounds and operational capacity. Retail locations in those markets are seeing low-single-digit net changes. In H1, terminal performance was steady in Latin America. We will not trade short-term revenue for channel health. Mexico will celebrate the 10th anniversary in Q3–Q4; the market will continue to roll out improved formats, and we are asking to have MINISO Land and Super MINISO in core malls in key cities. In terms of product and operation for distributor regions with established scale, we will deploy localized products and IP products. We fully recognize the launch cadence needs stronger planning. We have now built a more complete launch calendar that clearly marks key local holidays and the launch timing for different-stage IP, to maximize sales momentum. For categories with growth potential, we will help distributor markets iterate marketing plans, offering better scenario-based content, closing the content gap, and lifting sell-through of high-momentum categories.

For the overall product mix, we will phase out low-efficiency, low-margin SKUs, use value-for-money everyday products to make up volume, and bring high-value-for-money local bestsellers to drive sales.

OPERATOR

Thank you, Eason. Thanks to all the investors for your interest in MINISO. See you next time. This concludes today’s call.

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