MINISO heads into its third-quarter report as a company running two very different businesses at once. At home, the China operation beat its own targets last quarter, membership kept swelling, and proprietary characters like Yuyu and ChouChou showed real commercial pull. Abroad, management slammed the brakes, swapping a plan for 500-plus overseas store additions for a net reduction of 50 to 70 locations in the second half. This report should show whether the domestic engine is strong enough to carry the group while the international footprint is pruned back into shape.
The Street is looking for earnings of $0.39 per share on revenue of about $1.01 billion, which would be roughly 24% growth from the $814.3 million reported a year ago. That is a demanding top-line number. It is a touch faster than the 22.4% pace the group posted in the first half, which itself only slightly cleared management's 20% to 22% guidance. The earnings whisper sits at $0.38, a penny under consensus. That gap is too small to mean much, but it hints that the more skeptical crowd is not expecting an upside surprise on profit, which fits with how the last call went.
That call reset the profit story in an uncomfortable direction. Management widened the expected full-year decline in adjusted operating margin to 3 to 4 points, from 1 to 2 points at the start of the year. Full-year adjusted operating profit, once pitched as growing faster than in 2025, is now expected to fall by a high single-digit percentage. This quarter is the first real test of whether that reset was conservative or still too generous. Signs that margin erosion is stabilizing, perhaps helped by higher-margin proprietary IP such as ChouChou, would go a long way toward rebuilding credibility. Another downward revision would suggest the problems overseas run deeper than a timing issue.
The overseas details matter most. North America same-store sales cooled from about 10% in the first quarter to mid-single digits in the second, below guidance. Management blamed gaps in the IP launch calendar and stockouts of best-sellers, and both should be fixable. Product collaborations including Yuyu with Disney's Toy Story 5, the Lisa pop-up and the Thailand tie-in give the company a fuller pipeline, so a rebound in North American comps would support that explanation. Inventory deserves equal attention. Overseas turnover stretched to 273 days, and if that figure keeps climbing while stores are closing, markdowns could follow. The distributor channel, guided to fall by a low double-digit percentage, and TopToy, now expected flat in the second half, are smaller swing factors. Both could still weigh on the mix.
On the positive side, China needs to keep delivering. Domestic revenue grew 23% in the second quarter against original guidance for low double digits, and member contribution rose to 77%. Continued productivity from the new Super MINISO format, which management said steadily tops RMB1 million per store, would show the domestic upgrade is more than a one-quarter effect.
Sentiment has soured a bit, with bearish readings rising to 23.4% from 14.8% before the last report. Even so, the shares have gained 4.7% since that release while the S&P 500 slipped 2.5%. At $10.92, the stock trades near the top of its post-earnings range of $8.55 to $11.25, within about 3% of that high, though it remains well below its 200-day average of $13.41. A clean report could push it through resistance. The crucial question is whether the lowered profit outlook now looks like a floor. If China growth holds and overseas inventory and comps steady, the reset starts to look like a reasonable price for discipline. If margins slip again, investors may conclude the retreat abroad has further to run.