MINISO Group Holding Limited (NYSE:MNSO) Q3 2025 Earnings Call Transcript

MINISO Group Holding Limited (NYSE:MNSO) Q3 2025 Earnings Call Transcript November 21, 2025

Operator: Thanks for your patience, and also, welcome to join us for MINISO Group 2025 September Quarter Earnings Results Presentation. [Operator Instructions] We have already announced the 2025 September quarter performance early today, and you can also check our slides on investor relationship website. First of all, we are very happy to have Mr. Ye Guofu, the founder and the CEO, and also Mr. Zhang, our CFO, to join us for the webcast. Before we proceed, please refer to the safe harbor statement in our earnings release, and we are also going to make forward-staking statements. Today, we’re going to discuss non-IFRS financial indicators today. And we have already included that into and explained that in the filings we filed to the regulators.

And we also have already adjusted it with comparable indicators reported by IFRS. Otherwise noted, all the currencies in this presentation are in RMB. In addition, we also include financial and business slides for this presentation. [Operator Instructions] If you are using Zoom Meeting, you will be able to see the slides on the screen. And you can also check for the slides after the call on our IR website. Now let’s welcome Mr. Ye to start the presentation.

Guofu Ye: Good day, and welcome to MINISO Group 2025 September Quarter Earnings Results Presentation. This quarter, the group continued to deliver accelerated growth with revenue increased by 28.2%, supporting the high end of our guidance. And you can see multi-key indicators, including same-store sales and adjusted operating profit, either met to exceed our prior guidance, demonstrating the resilience and growth potential of our business model. Today, I’m going to walk you through quarterly performance highlights and share with you some of our insights for strategic initiatives. In September quarter, the total GMV grew by 28%, revenue increased by 28%. Same-store sales being accelerated, reaching mid-single-digit growth. Our 2 flagship brands, MINISO and TOP TOY demonstrating accelerating revenue momentum in Q3.

MINISO brand grew by 23%, while TOP TOY delivered exceptional revenue growth of 111%. On the profitability front, the group maintained a stable GP margin of 44.7%, and the GP margin approached to RMB 2.6 billion, grew by 27.6%. This quarter marked a significant milestone as our adjusted operating profit crossed RMB 1 billion threshold for the first time, grew by 40.8%, reaching RMB 1.02 billion. Our adjusted operating margin stood at 17.6%, show sequential improvement from Q2. Coming next, I’m going to walk you through our quarterly performance across MINISO China, MINISO International and TOP TOY. Starting with MINISO domestic operation, revenue grew by 19.3%. The performance is outstanding, whether compared with China’s total retail sales of the consumer goods grew by 3.4%, while online retail sales of the physical goods grew by 7.5% of the same period or measured against our previous guidance.

What makes me particularly proud is the growth was coming from same-store sales growth, indicating high-quality growth that is more sustainable with lower operational risk, reflecting our continued enhancement of MINISO’s core operational capacity. Entering into Q4, same-store growth still remained robust with strong National Day holiday performance, driving low double-digit same-store growth for the entire month of October. This quarter, we achieved a net addition of 102 MINISO stores domestically. Year-to-date 2025, we have accumulated a net increase of 21 stores. Our franchise base has already surpassed 1,100 for the first time. Since the beginning of this year, our franchise network welcomed new partners with diverse breakthrough and resources, enhancing MINISO franchise system, not only in scale, but also in business ecosystem sophistication.

Q&A Session

MINISO China business has significantly outperformed the broader consumer market, fundamentally driven our enhanced systematic operation capacity, take Q3 happy holiday shopping at MINISO campaign as an example. Based upon the comprehensive data analysis across multiple categories during holidays and also weekend, we forecasted that toy would be the category with greatest performance elasticities. Consequently, from the early product development to inventory planning, we allocated sufficient resources and capacities for toy category, and we also leverage the summer scenarios. For China front, we secured a prime location in top-tier shopping district with peak summer periods in advance of the PoPark stores, where for our regular store, everything from creative display merchandising to visual presentation of the promotion materials was deeply aligned with seasonal atmosphere and the core product highlights, achieving end-to-end customized operations.

Compiled with the TNT brand endorsement announcement in August, we ultimately created powerful strategies of the right type channel, right timing, right product and the right marketing, maximizing the growth potential of our summer toy category. Turning to our international markets. In Q3, revenue exceeds RMB 2.3 billion, grew by 28%. Our international MINISO store network expanded at a net 170 stores during the quarter with year-to-date net addition of 306 stores. Our largest international market, United States, delivered revenue growth more than 65%, with same-store sales growth in a low double digit, exceeding our expectation. Our operational initiative in U.S. continued to strengthen and stable our long-term growth and continued to improve new store success rate, brand recognition and also with consumer retention across multiple dimensions.

Starting from this year, we have a store expansion committee structure and a clustered store opening model, opening multiple stores at the same time in different locations. This can actually improve the management efficiency, and also, with great brand exposure, attracting great consumer attention. Year-to-date 2025, new member acquisition in U.S. market have grown by 100%. By progressively building bidirectional communication channels with consumer, we enable the companies to more precisely understand the consumer preference. Our membership program not only driven our revenue growth, but also providing critical data insights and consumer touch points for further enhancing repeat purchase rate. Regarding the product assortment, our IP product launch cadence operates like the release of the same, different season and monthly features, providing freshness to the consumer and encouraging the store activities.

You can see that for beauty, consumer electronics, food and beverage, mainly served to drive the basket attachment and repeat purchase once consumers are in store. MINISO is committed in creating balanced product portfolio to achieve a more stable store operating model to address diversified consumer needs across different shopping occasions. The stronger result of the MINISO in both China and the U.S. market are giving us tremendous confidence in both international markets. Our experience in both major markets has provided proven systematic insights across 4 disciplines: optimizing store site selection, creating differentiated store formats, achieving precise product channel alignment and orchestrating full funnel market synergies, all of which can help to consolidate operational stability and long-term growth.

International markets represent our key opportunities for MINISO’s long-term expectation. We will systematically replicate and scale up our validated operational framework to more countries and regions. Every initiative is facing on the long-term sustained profitability, ultimately unlocking tremendous potentials of the global markets. TOP TOY delivered outstanding revenue growth by 111% in Q3, store account expanding a net increase of 40 locations, reaching 307 in total, including 292 in China, 50 outside China. Benefiting from the enhanced product competitiveness, particularly the rapid scaling of our proprietary IP, and it’s actually achieved a very good growth, especially our proprietary IP, [indiscernible]. TOP TOY achieved a middle single-digit same-store sales growth in Q3 with significant gross margin optimization.

TOP TOY also continued to elevate store presentation, transforming proprietary IP into more immersive experience, continue to contribute to our owned IP and proprietary IP and brands. This quarter, we achieved 2 significant milestones. First of all, our global network store number already surpassed 8,000 milestone. And our brand presence is actually in key global markets from Asia to Europe, from Americas, from established commercial districts to emerging neighborhoods. Our product and service are reaching an ever-expanding consumer base, marking a new chapter for our global expansion. The second milestone was our quarterly revenue crossing RMB 5 billion threshold for the first time, while a single quarter adjusted operating profit also break through RMB 1 billion mark for the first time.

Moving forward, we will transition from scale-driven growth to a new development paradigm, emphasizing on both quality and scale, taking confidence and measured steps along the pathway of high-quality development. Achieving high-quality development need strategic directions and sustained execution excellence. For the past quarter, both our channel upgrades and IP metrics strategy have delivered significant breakthroughs. On the channel upgrade front, our inaugural MINISO FRIENDS store that has been inaugurated in high mall in Shenzhen. The FRIENDS format represent a crucial innovation with MINISO’s channel upgrades with the following features. First of all, store design and product curation emphasize on IP content presentation, creating unique shopping experience akin and movie release schedules based upon the synchronized IP launch reason.

Secondly, leveraging MINISO’s comprehensive category coverage and multi-IP metrics product development, MINISO has already become an anchor tenant for selecting shopping malls so that we will be able to enjoy primary location with favorable lease terms and more marketing support from the mall operator. Thirdly, MINISO FRIENDS store positioned at accessible luxury store, designed for mid- to primary shopping center represent a strategic channel segmentation initiative for MINISO Group. Regarding proprietary IP, by November 2025, we have already contracted 16 pop toy artist IPs, building a rich and diversified owned IP portfolio with enriching IP value of our core objective. Our first artist at trendy district has already been launched at Beijing Road Play Grand store in Guangzhou.

Through comprehensive scenario-based renovation of the designated area of the store on third floor, we precisely embedded the exclusive bird view of our TOP TOY IPs. The competitive island area generated a sales performance exceeding a typical store’s entire monthly sales result in just 2 weeks. Furthermore, we created atmospheric installations and interactive elements that align the IP character personas transforming every space into extension of the IP storytelling. When consumer enter this immersive store environment, they not only experience the characters appeal and narrative depths of our system, but also deepen their IP understanding and emotional connections through the experimental touch point, facilitating meaningful transmission from product purchase to IP affinity, strengthening the emotional bond between consumer and IPs. I believe over the longer run, MINISO’s core competitive advantage in category architecture and IP portfolio will become increasingly pronounced.

Geopolitical macroeconomic uncertainties represent universal challenges to all companies. We are already well positioned for that. MINISO maintained the industry’s most balanced and diversified IP portfolio with IP assets spanning international renowned licensed properties, primary domestic content, proprietary IP across multiple development tracks. Our extensive category cover enable rapid product assortment and also merchandising adjustment based upon the seasonal needs. And more importantly, we also have precise capture emerging trends and end-to-end channel control capacity, allow our operation to be more adaptive to the market change. Looking to the future, MINISO will capitalize on the expansive opportunities with lifestyle consumption sector, driving high-quality performance through continued strategic evolution.

That conclude my remarks. I mean, next, I will turn the floor to Eason, who will walk you through our first 3 quarters’ financial performance, please.

Eason Zhang: Okay. Thank you. Hello, everyone. Welcome to join us for our September quarter earnings release. In front of you is a wonderful scorecard, which is actually showcasing how we leverage flexibilities and high-quality growth to navigate the future development. So first of all, let me help you to review our performance against our guidance. There are 4 guidance we provide you from revenue to SSSG and adjusted operating profit. We hit our profits. And there you can see actually regarding the guidance of the revenue growth. Well, for SSSG, we gave the guidance of a lower single-digit growth, but we made it mid-single digit. But a few points I’d like to share with you. For MINISO China, we made it to a high single-digit growth for SSSG, while at the same time for MINISO International, and we also made a middle single-digit growth.

For TOP TOY, it also registered a mid- to high single-digit growth number. It is also worth mentioning that many of our stores in international market are franchised stores. The control is less than the direct operated stores. But even against such a backdrop, we will be able to have a low and positive growth among our 3,000 stores worldwide, while at the same time, you can also see adjusted operating profit also registered a double-digit growth, reaching 50%, where for the adjusted operating profit margin, our previous guidance was a minor improvement month by month. But actually, we made a net profit, 17.86%. And the decrease has already been narrowed down from 2.3 percentage to 2.1 percentage. From a revenue perspective, there are a few things I’d like to draw your attention to.

First of all, 28.2% of the growth with RMB 5.8 billion revenue already go beyond our expectation. It’s also the first time for the group’s revenue to exceed RMB 5 billion. Our Q1 revenue growth was 80.92%, and also Q2, 23.13%, where for Q3, that was 28.2%. And you can also see that we foresee for Q4, the revenue growth would be around 25% to 30%, continue to deliver our commitment for a full year revenue growth by 25%. Well, let me also dive into our operating segments. MINISO Mainland China revenue grew by 90.3%. MINISO International growth was 27.7%, reaching RMB 2.3 billion. TOP TOY revenue surged by 111.4%, reaching RMB 570 million, significantly exceeding our expectation. Breakdown into domestic versus international, group’s Mainland China revenue grew by 25%, and international revenue grew by 32.9%.

We’ll break down to different brands. For MINISO, as a brand with GMV close to RMB 35 billion to RMB 40 billion, and we’ll still be able to manage a revenue growth by 23%. While for TOP TOY, the growth was more than 111%, as I mentioned. High-quality growth is inseparable from SSSG. In Q3, SSSG performed good, which can help to drive the same-store growth by a mid-single-digit number, among which in Q3, MINISO Mainland China same-store sales achieved high single-digit growth. Overall revenue growth was approaching 20%. October continued a strong same-store momentum, reaching a low double-digit growth, while for international same-store growth was a low single-digit number. Strategic markets like North America, Europe showing outstanding same-store performance.

U.S. and Canada achieved low double-digit same-store growth in Q3, too. While for TOP TOY, same-store sales grew by mid-single-digit number, in line with our expectation. The improvement is because we captured the strategic and high potential product category with multiple sales opportunities. We also optimized the product assortment. We leveraged direct sourcing and international market, enhancing the merchandise dollar capacity, while at the same time, we always focus on product, coordinating with frontline operation, strengthening the refined product assortment management, conducting customized product development and also create some regular best sellers. More importantly, we emphasize on seasonal and holiday opportunities. We organized holiday plus IP-themed pop-up stores to stimulate the sales performance.

Our directly operated market are the closest one to our headquarters management radius and also the first place where our strategies and adjustments take effect. The domestic market is our largest, most mature, but also most competitive intense market. Achieving positive same-store growth in such a fierce competition market in China not only validates our effectiveness of the measures we take, but also reflect our rapid market response capacity and strong execution. Through channel and store format differentiation, we continue to explore the boundaries of the same-store efficiency, continue to open up long-term store expansion opportunities. Excellent same-store performance has also emerged in our strategic directly operated market like U.S. Stores are the smallest profit-generating units, just like the sales of the body.

Pursuing high-quality growth requires refined optimization of the store model beyond the traditional mall stores. We also actively explore plaza store. We leverage scientific decision-making to be selective for store opening, cluster openings and refined store staffing, continue to optimize profitabilities for the stores, allow the smallest profit unit can fully realize the potential in driving future high-quality growth. We are very happy to see that for our international directed operating stores, including U.S. and Canada, show significant Y-o-Y improvement in operating profit margin in Q3. We plan to first extend our China-U.S. success experience to Southeast Asia market in 2026. We will be in Southeast Asia market for nearly 10 years. Markets like Indonesia contribute substantial profits to company every year.

However, alongside the local macroeconomic downturns and the social unrest, we faced certain operating challenges, especially the need for upgrading channel product assortment, organizational and Thailand improvement. The market optimization, we bottomed out this year. It’s going to be the key focus of our strategy in 2023, and we are very confident to achieve success in those markets similar to what we accomplished in China in 2025. This quarter, the GP margin was 44.7%, used to be 44.9% same period last year. Looking at the first 9 months of 2025, GP margin was 44.4%, which was 44.1% last year. And I also mentioned our GP margin has climbed from 27% in 2021 to 44% today, increased by 70 percentage points over 4 years. This improvement stemmed from, first of all, continued increased contribution from our international revenue and also upgrades and solid execution of IP strategy.

As international-directed operated business continued to expand along with category structured adjustment between quarters, seasonal fluctuations are inevitable. Going forward, we will continue to focus on balancing product price and volume. For IP product, we will persist in product innovation and value for money. And for non-IP products, we will emphasize product profitability and quality to price ratio, achieving better sales performance while maintaining overall GP margin. For this quarter, deducting the equity payment expenses and incentives, our SBC grew by 33.7%, representing 27.6% of the revenue. It is worth noticing SBC, share-based compensation, altogether totaled RMB 176 million, significantly increased compared with the previous period, primarily due to the TOP TOY equity incentives plan.

The selling expenses, excluding SBC, grew by 36.5%. The increase was because our international-directed operational store investment, including the labor cost, leasing, depreciation and optimization grew by 40.7% in Q3. Well, you can see in Q1, this number used to be 71.4%, and 56.3% in Q2. So you can see directly operated store, their selling expenses growth has been clearly slowed down, while at the same time, the directly operated store revenue growth was close to 70% higher than the growth rate of the related expenses with significant deceleration because of our continued refined operation and strict expenses management. Well, coming next, let me also touch upon YH. Our investment in YH began to impact our financial statement last quarter.

We accounted for these transactions using the equity method. The YH investment affect our net profit by RMB 146 million this quarter, which has been included from the non-IFRS financial metrics. Well, let’s also talk about effective tax rate. With IFRS categories, our effective tax rate was 33.9% compared with 24.8% same period last year. 33.9% of the tax rate sounds to be relatively high, but it’s not the true tax burden. It’s primarily due to the share-based compensation and YH losses, where those items can’t be deducted pretax under the tax law, but they actually didn’t generate income tax relief, resulting in a higher effective tax rate on our financial statements. These expenses totaled around RMB 320 million. If we’re excluding those impacting the nonoperating related items, our adjusted effective tax rate was 22.8%, 1% lower than last year.

Let’s also talk about profitability. Adjusted operating profit grew by 40.8% and reaching RMB 1.02 billion. Those were actually showcasing our operating quality. Adjusted operating margin was 7.6%, down by 2.1%, but a great improvement compared with Q1 and Q2. The decline in adjusted operating margin was due to the structural changes of the revenue composition. Looking at each of our major business segments, operating profit margin were either flat or improved. For example, international directed operating business maintained a high operating profit margin by a low single-digit number. China franchise business and international agent business have a flat growth, but why we see a 2.1% decline, the key reason is because international-directed operating revenue proportion continued to go up.

The business profit margin still facing some gap compared with asset-light franchise and agents business model, causing dilution of the overall profit margin. But you can see as U.S. and Canada already have the directed operating model, the operating profit margin for international-operated — directly operated business will continue to improve, especially we see low double-digit growth of the U.S. directly operated business going to bless the local profit margin, but we are operating in different countries and regions. We inevitably face profit fluctuations due to the regional economic and social environment. Our team is still young. Capacity needs to be improved, but there is significant room for growth. Q3 adjusted net profit grew by 11.7%, and adjusted EPS grew by 12.7%, adjusted EBITDA grew by 90%.

The Y-o-Y also accelerated by quarter-by-quarter, but adjusted EBITDA margin was 23.4%. For the working capital, our inventory turnover remained robust and efficient. As of Q3, MINISO brand inventory turnover was 87 days compared with 104 and 94 days in Q1, Q2. You see our inventory efficiency improved in Q3. And at the same time, as of September 30, our cash reserve was RMB 7.77 billion, remained robust. And our net cash flow from operating activities reached RMB 1.3 billion with a net cash — net profit to cash ratio 1.7. Capital expenditure was RMB 330 million. Free cash flow was RMB 970 million. In first 9 months of this year, net cash flow from operating activity was RMB 2.01 billion, exceeding adjusted net profit for the same period. Capital expenditure was RMB 770 million.

Free cash flow was RMB 1.55 billion, demonstrate our high-quality profitability, efficient working capital management and our stable business, providing fuel for our future high-quality development. Last, but not least, I’d like to walk you through the outlook. Despite pressures and challenges in the micro consumption data, we remain confident achieving full-year guidance, having a 25% full-year revenue growth and RMB 3.65 billion to RMB 3.85 billion in operating profit. We see Q4 revenue grow by 25% to 30%, with China and U.S. same-store sales achieved double-digit growth. For the full year, we expect the China and the U.S. same-store grow by a mid-single-digit number. We expect Q4 operating profit will register double-digit Y-o-Y growth. Operating profit margin will still decline due to the revenue structural changes, but the decline would be modest, close to Q3.

North America is about to enter into peak shopping season. China Q4 will maintain rapid growth. Even continued macro weakness in Southeast Asia may bring some impact, but our global business layout will diversify our operating risks. We will continue to talk to the capital market regarding the progress and the expectations. Thank you very much. Thank you. Let’s now move into Q&A session.

Operator: [Operator Instructions] First of all, let’s welcome Michelle to raise a question, please.

Michelle Cheng: Congratulations on the company’s high-quality performance in September quarter. I have 2 questions. My first question is regarding domestic MINISO business. From the macro perspective, since Q2, despite consumption slowdown, we still see that MINISO’s same-store sales and overall revenue growth continue to be accelerated. Particularly, we noticed the company seemed to have accelerated the rollout of the new store format. For example, Chairman Ye mentioned the MINISO FRIENDS as a new format. In your previous interview, Chairman Ye, you also mentioned you are going to renovate 80% of your domestic stores. Can you share with us the current progress of those store renovation, the targets? What about the unit economies?

Anything you can share with us? This is actually my first question regarding domestic MINISO stores. And I also have another question regarding international outlook. Just now, Eason walked us through the Q4 outlook. Is it possible for you to elaborate on that because Q4 is always a peak season. Last year, we saw some adjustment. While for this year, enter into Q4 peak season, is there something worth noticing regarding inventory preparations, marketing, store operations? Can you share your work on the next year international strategy planning? Those are the 2 questions I have.

Guofu Ye: We are extending the space. We upgrade from the small to large with greater frontage and better display space. The larger stores truly provide consumers with a better experience with more display space, larger, more attractive displays. We want to give more consumers a wonderful shopping experience. Moreover, opening large stores has a higher barrier to entry. Only MINISO’s extensive IP portfolio and category place can truly support a large store format. If you don’t have enough IP and product category, you won’t be able to accommodate large stores. Our 2025 channel optimization achieved initial success, and we have accumulated systematic methodologies and experience. However, the number of the optimized store isn’t large yet.

In the upcoming years, we will proactively plan and implement store optimization work, hoping that we can optimize more stores next year. The pace of the store renovation would be gradual. We are not going to rush for that. Most importantly, we need to have the right location selection. Many existing stores already have a good profit margin. We will advance our strategy based upon the lease and the new store site selection. Thank you, Michelle. Let me just give a few updates. In the first 3 quarters, we’ve relocated and expanded and optimized more than 200 stores. The optimized sample store show significant store efficiency improvement, maintain healthy sales per square meter and the rent-to-sale ratio declined by a low single digit. This can help to driving high performance while achieving win-win for both companies and franchisees.

Both parties have seen revenue and profit growth from the optimized stores. Store optimization will become a regular part of our channel expansion work. Well, regarding the outlook of the Q4, a few points I’d like to share with you. I think the September ordering conference was very successful with record high ordering amounts. 5 categories each exceed RMB 100 million in orders, and all specialized sections broke historical records. Category were quite evidenced. For IP merchandise, we have a strong creative outlook, where for value for money products, we continue to enhance cost and pricing competitiveness. Well, additionally speaking, our international, localized IP design and category implementation has already been improved. For example, the Mickey Merlion limited edition launched in Singapore in October, an airport store exclusive that perfectly match channel and merchandise.

The product has extremely scarcities and differentiation. It actually created a new single store record. Our executive bearer was even asked by tourists at the airport to borrow her passport so that they can purchase more Mickey Merlion product from initial market insights to creative design to logistics support to integrated marketing every step worked closely, demonstrating IP merchandise store operation and marketing capacity integration. This is a very good and replicable IP operation model. This above demonstrated deeper collaborations between IP partners across entire value chain, including channel, product, operation, design. This month, Zootopia film would be released worldwide. And yesterday, Director of the Zotopia was also providing us very good comment on MINISO pop-up store by weaving ourself design product.

We remain confident about long-term international opportunities. MINISO’s achievements in both China and the U.S. market over the past years give us strong confidence in international market growth potential. The practice in the 2 major markets have provided us with proven systematic insights, optimizing store opening decision mechanism, creating differentiated store model and to be precise to have the product channel matching and full funnel marketing synergy. International markets are MINISO’s core potential field for the long-term growth. Those proven, systematic, operational framework will gradually be replicated and extended to more countries and regions with every step centered on long-term sustainable profitability. And ultimately, we will be able to steadily release the tremendous global market opportunities.

Operator: Next question, let’s welcome Lina from HSBC.

Hau-Yee Yan: Can all of you hear me?

Operator: Yes, please.

Hau-Yee Yan: Eason and Mr. Ye, congratulate on company’s IP strategy success. I have a question to you. I know that IP means a lot for your same-store sales growth. There are some pulse-like growth where we know that for many of the investors, we really would like to know how sustained your growth would be when you just do IPO? Your product category are quite similar to Muji. But how are you going to comment on the non-IP product, especially from the existing suppliers? For example, if you’re going to benchmark with Muji, Muji also registered a very good growth in China for the past few quarters, I’d like to ask you, how sustainable the growth would be? What are those categories that are going to register sustained growth in the near future? What would be your plan?

Guofu Ye: We can see within the consumer conception, the most important and the best one is interest-driven consumption. And you can also see the most promising one is also the interest-driven consumption. Consumers no longer just pursue product functionality contributes, but also value the aesthetic identity, social labels, killing experience and spiritual satisfaction behind the product. That would be the ultimate pursuit for consumers. Going forward, consumer will pay for passion, pay for emotions. This interest-driven, emotionally connected consumption demand has higher stickiness and prime space and also becoming the company’s core lever to navigating circles and building differentiated competitiveness. The IP transformation is not abandoning our existing category advantage, but rather IP plus core categories do well drive, allow our 10 years of accumulated experience to unleash greater value.

Our supply chain resources covering the home goods, cosmetics, stationeries, [indiscernible], toys and snacks, along with the mature multi-category product development capacity, which are a great way to support our IP strategy implementation. MINISO is a very unique business model worldwide. IP empowerment isn’t only about single point best seller, but also the full scenario penetration. Our product development capacity’s key is understanding category and better understanding how IP can empower categories rather than printing a logo. For example, since November, MINISO’s seasonal product has grown very fast, plush socks, scarves and gloves has captured and converted the traffic brought by IP. Our original key category are the perform [indiscernible] store.

Essential categories, including home goods, cosmetics and stationery products, contribute our traffic — stable traffic and repeated purchase, where IP is a growth catalyst, enhancing product design appeal and the brand pioneer through collaboration and same sale rules. We can also leverage IP popularities to boost the core category sales. The model is quite unique because single IP brands lack multi-category supply chain support, making full scenario coverage difficult. Traditional general merchandise brands lack mature IP development and operation capacity, but our 10 years of accumulated multi-category supply chain plus IP-integrated development capacity allows IP to rapidly penetrate into high-frequency consumption scenario, where key categories can leverage IP to break through the growth bottlenecks.

Ultimately, forming a healthy growth structure of having essential category men traffic and category boost to profit.

Operator: Let’s also welcome Mr. Wei, Xiaopo from Citi.

Xiaopo Wei: Can all of you hear me? Yes, great. My first question is quite forward-looking. Just now, I see Eason has already provided the guidance for the Q4 performance. As Eason, you are quite conservative about the guidance, so I think I don’t have any doubt on that. But a question I may have is that U.S. business has a strong Q4 seasonality, where Q1 in 2026 will see seasonal declines. In your prepared remarks, you also mentioned you are improving your operational efficiency to buffer the seasonality impact. Is it possible for you to share with us from Q4 2025 to Q1 2026, whether the so-called seasonal decline trend would be similar to last year or narrow down compared with same period of last year? This is my first question.

My next question, Mr. Ye, you mentioned about the China IP go for international market. You have already signed 16 artists. Then you’re probably going to bring those IP outside China. Mr. Ye, according to your experience, in international market, for Chinese IP go for international business, how long will it take to develop them there? And whether it’s going to hurt your profitability?

Eason Zhang: Let me just respond to your questions regarding the seasonality of the U.S. business. And Mr. Ye will answer the second question. I think the questions are well raised. For the past 3 to 4 years, especially starting from 2021, and we started to work for direct operated business in U.S. Q1, generally speaking, is a low sales season in U.S. The store sales in low season will be around 10% to 20% lower than peak season in Q4. This is the common practice of the U.S. retail industry, but how we can iron out the seasonalities. One thing is store operation, where another thing is the store opening. You can see that our U.S. store, they do have a very good experience. A key takeaway is that in Q4 of the previous year, you have to make sure your stores being well prepared for presence.

In Q4 of this year, we’re going to have all the stores ready and not open new stores next year in Q4 in order to make sure that all stores are well in place in the first 3 quarters of every year. For example, in 2026, when I tell you how many stores we’re going to have in U.S.? We need to make sure at least half of those promised stores are already been contracted. This is also a common practice in retail industry in U.S. In Q1 of 2026, you see we have a very nice store opening growth to iron out the seasonality on scale, where on the other side, regarding the business operation, we’re not going to smooth out or iron out, but we are going to follow the trend because the essence of the retail is to capture and satisfy the consumer needs. For U.S. and the European market, they do have a very strong seasonality and the festival attributes.

This is something we can work on. For consumers, they have very different needs in different seasonality. For example, Black Friday is coming. It’s the peak season for consumers to spend, and the consumer willingness to consume were peaked. We have already made inventories ready. We have worked on the supply chain, making sure we have enough inventories to take care of the shopping festival needs from the consumer. And you can see in U.S., Q4 is still going to register good growth. We’re not going to give up on the golden growth opportunity in Q4 just because of seasonality difference compared with Q1 of next year. We’re going to leverage the seasonality dividends, having good marketing, seasonal disciplines as well as strategic inventory building, translating seasonal fluctuations into an exemplifier of our business.

This is how we respect the market and also be able to continue to follow the retail development. Well, you can see that MINISO brand Chinese IP overseas will definitely leverage our unique advantage, not letting China IP to go it alone. We’re going to leverage our past licensed IP experience and massive IP portfolio for mutual empowerment. For example, on first of this month, MINISO Canada National flagship store has its grand opening. Such a prime store provided best stage for IP going overseas, representing a key milestone for MINISO global IP strategy. The Canada National flagship store open day sales again broke North American new store open sales record. Such successful opening was inseparable from the IP catalyst. The event was featured by [indiscernible] surprise, triggering people to check in and purchase the product.

Coordinating with this store opening, our gifted bear family made its overseas debut with very cute and lovely design that filled with the opening atmosphere as a joy for energy. The Chinese IP go for international market is not starting from 0. It was standing on the shooter of the giants to — for steady growth. We have every confidence leveraging our store resources worldwide and a very successful experience to bring Chinese IP international wide.

Operator: Coming next, let’s welcome Samuel from UBS, please.

Samuel Wang: I have a question also concerning U.S. market. Recently, no matter for the capital market or investors, we find out the U.S. consumer market has been relatively weakened recently and especially the performance of the retail market in U.S. was not looking right. I would like to ask you, what do you see in the U.S. market, especially in October, what would be the SSSG in U.S.? In that way, how you’re going to find your own measures? And also, for U.S. market, specifically, how we’re going to look into a full-year revenue and profit guidance for U.S. market?

Eason Zhang: I’m Eason. Let me just respond to your question. U.S., indeed, we see some of the high-frequency consumption data, especially credit data consumption from the U.S. was quite weak. But it was actually external macro environment pressure that it cannot be avoided. What we can do is to strive to be the best of ours and give our all. I have already mentioned to you the 3 strategies being mentioned. For example, the thing was to take care of the holiday, early preparation, sufficient inventories and good adoptions. Now, we have already been prepared for the decorations ahead of the time, finished creating holiday shopping experience. And the store inventory is more abundant than last year. We expect that the U.S. Q4 revenue growth would be a low double-digit growth, where for Q4 revenue growth would be 50% to 55%.

The same-store growth will be low double-digit growth. Well, for Q4, I think the scale growth would be slower than Q3. It’s because we are slower than last year for numbers of the stores opened and the cadence, but still, the profit is going to generate a healthy growth. Thank you, Samuel.

Operator: Let me also welcome Xu, Xiaofang from Citic.

Xiaofang Xu: I have a question regarding your proprietary designer IP. I can surely feel the company investors and the consumers have a high expectation of a proprietary designer IP. Looking to the next 3 years, how the designer and the proprietary design IP may look like? Are you going to have a designer ecosystem organizing the trendy toy communities exhibitions, where you invest in the secondhand market?

Guofu Ye: By end of June, we have already signed 9 designer IPs. And by Q3, we signed 16. We are proactively discovering highly potential original toy art IPs globally, working hard to build MINISO trendy toy IP landscape. When there is one IP breaks out, it will definitely show exponential growth. The upper limit for proprietary IP volume is anchored to the trillion level interest to consumption market. Generation Z has already become the key consumption force, close to RMB 260 million of them, and their annual consumption would be more than RMB 5 trillion, and they are happy to pay for emotional value. And — but at the same time, proprietary IP growth always have the risk backstops. We continue to test market through small batch trial sales data iteration, but adjust our design style and the category based upon the market needs and feedback.

Such model allow proprietary IP to grow steadily within a very safe trial and error framework, avoiding traditional IP incubation pain points of high investment, high risk and unpredictable returns. We’re going to continue. Where for MINISO, we have a great advantage, full category coverage, omnichannel penetration, global layout, full funnel operation. Our stores themselves are theme park ecosystems. MINISO LAND and MINISO FRIENDS has a checking area with proprietary IP characters, placing IP characters sculptured model in the most prominent areas. We also have audience zones like Shiba signing event. And we also have the dedicated product display areas and interactive activities like the gifted bear family plush [indiscernible] that you can see when you visit MINISO stores.

Products are key in IP ecosystem. Good product doesn’t consume IP, but actually enhance IP value. Yu Yu second-generation ring [indiscernible] has excellent sales with the product innovation and liability maximizing secondary creation attributes. In marketing, MINISO plush festival gifted bear mascot performed supporting store opening activities, and screens in store checkout areas play cute gifted bear family in cartoon clips in snow form that can help enhance IP exposure and strengthen IP personalities and images.

Operator: Coming next, we’re going to have Runbo from CICC.

Runbo Yang: Maybe we will move to our next analyst first. Let’s also welcome Shi, Di from Huatai Securities. Can you hear me?

Di Shi: Yes. My question is regarding your China business. I find out your store format is more in retail, including the SPACE, LAND and FRIENDS stores and flagship stores. And can you break down on the appropriate proportion structures of different store types in sequential expansion plans? And for your store renovation and upgraded stores, how it’s going to drive your domestic business growth?

Guofu Ye: In the near future, we’re going to have 2 kinds of the store models, different models are going to have different VE and logo. The first one is the Wonderland and the regular stores for — we leverage meaningful space, meaningful land and meaningful land to provide people a Wonderland experience. But at the same time, we also have the regular stores, benchmarking the higher tier and the newer tier cities, asking for the prime location, where we’re going to make sure it can cover as many as the traffic possible. Looking at the quantities and different store types, more will still be the flagship stores and existing store location optimization expansion, where we have 2 logos for the regular stores. We have 2 store types.

When consumers come to our store, when they look at our exterior design, they will surely understand what are those MINISO LAND, FRIENDS and SPACE, what are the regular stores, where at the same time, we can see still — we’re going to continue to work on the flagship store and the store door renovation, where we’re also going to leverage our brand priming and bargain power to leverage the best location in the commercial districts and continue to upgrade our channel. We’re also going to leverage 8,000 stores to have a good and high-frequency consumer feedback to provide us the market data and continue to empower our channel upgrading and also lay a solid foundation to further improve our product performance. So that’s the reason starting from this year on, our store type is going to be more diversified.

Well, at the same time, even for the MINISO, we have MINISO SPACE, MINISO LAND and MINISO FRIENDS. And in the near future, we’re also going to have the Super MINISO. Well, for regular stores, we do have the regular stores, small stores, car parks and also the train station stores. By so doing, we’re going to be more focused on our IP strategy and making sure we really roll out the product for the price to quality product, which will make our store presence more clear to the consumer, which will also create good space for our IP strategy to continue to navigate the market development.

Operator: Coming next, we’re going to have Runbo from CICC to raise a question.

Runbo Yang: Can all of you hear me?

Operator: Yes.

Runbo Yang: My name is Runbo. Congratulate on the continued optimization of the company. And 2 questions. First of all, I see your domestic business continue to go up with more larger and well-performed stores being demonstrated. What would be your next year business development and your store number forecast? My second question, for outside China, especially outside China, U.S., what would be the retail market you see now? Do you see some pressures? What will be the regional difference — performance difference?

Eason Zhang: I’m Eason. Let me just respond to your question. In China, we have already confirmed, in China, we are going to seek for high-quality growth, inseparable for the store growth, where in China, we have a mid-double-digit or even high-double-digit growth, which would be supported by SSSG improvement. Well, for this year, our internal KPI assessment also introduced SSSG and hoping that we’re going to improve our performance in 2026. The SSSG target for 2026 are not being confirmed yet, but we hope we can have the best-in-class SSSG in our industry. Regarding international business, in Q3, the international market that performed weak are the third-party agency markets, especially in Southeast Asia and Latin American markets.

There are some macroeconomic seasonalities. For example, the local currency exchange rate fluctuations and also the consumption tax changes. But we are happy to see that from beginning to now, the terminal GMV growth is much better than our shipment GMV growth. In other words, our agency inventories would be quite healthy. They can still travel light in 2026. In some key markets, like Southeast Asia, GMV already been accelerated in Q3 with a double-digit growth. And we also see there are some comparable listed companies in Southeast Asia, say October consumption stay improved, but we’re still observing the performance. Thirdly, we will also be proactive in adjusting the product assortment channel. Many of our investors have already joined us for the order meeting with the new heights being achieved.

I surely believe those high order would continued to be converted into revenue contribution in the next few quarters. More importantly, we are very confident that our success in U.S. and China proven our business ability and resilience. We have every confidence to that. For overseas market, we do have the direct sales and agency business. Direct sales would be something we can reach first, which can actually showcase our key market sensing capacities, fast response, where agency market, it was somewhat not easy to be well managed, and we are adjusting the assortment and the channel. We have already identified the root cause. Let’s leave more time for further execution to improve the performance.

Operator: Final question, Anne from Jefferies. Can you hear me?

Kin Shun Ling: I have 2 questions to you. Now, you see your equity incentives plan was registered a high number. Eason also mentioned there are some equity incentives from TOP TOY included into Q3 performance. Is it possible for you to share with us regarding equity incentives plan? What are the KPIs inside? And how it may look like in next quarter? Will you continue to have such equity incentives in the next few quarters? My second question for TOP TOY, I think your drafted prospectus has already been filed. What would be your IPO schedule for TOP TOY? What would be the relationship between you and the TOP TOY? I know you may have some related party transactions. And many of the profit and sales being given to TOP TOY. But once TOP TOY has been IPO-ed or spin offed, what will be the relationship between the 2 entities? And how can we protect the interest of the stakeholders of the MINISO?

Guofu Ye: For this quarter and the next quarter, the expenditure was relatively high due to the equity incentives plan for TOP TOY. As you have already mentioned that for TOP TOY, its revenue doubled this quarter, significantly exceeding expectation. We believe excellent team in excellent sector combined with incentives, they can release more growth potential. TOP TOY has always been MINISO’s fully consolidated subsidiary. So MINISO shareholders were also benefited from TOP TOY’s high growth. The IPO plan is advancing now. We will inform the market when any progress being made. Both industry and the TOP TOY brand are in rapid development period. As a leading player, TOP TOY’s market share continues expanding from user to category to region.

We continue to explore the boundary. TOP TOY also see abundant market opportunities. The only reason for IPO is hoping TOP TOY can become stronger and continue to expand its business, fully capture the broad opportunities in the trendy toy market. Okay. Let me just give one more comment for Anne. Internally, we actually made some long-term discussion. There’s no better strategies to advance by having both entities, MINISO and TOP TOY, would be the best strategy. We can leverage MINISO’s full category and omnichannel operation and global presence along with TOP TOY as a specialized trendy toy brands. The trendy toy market is growing very fast with explosive growth rate. I believe both business would be able to let our business to be the top one in the dual market.

You were worried about SBC expenses. It’s going to be RMB 100 million for this quarter and another RMB 100 million for next quarter. It’s actually a normal accounting that after we have been IPO-ed. For MINISO, in 2020, after IPO, you can see that SBC and the team equity incentives plan, it’s going to be diluted and amortized a few quarters after the IPO, and it’s going to have higher IPO in the first few quarters, but going to be smaller in the next few quarters.

Operator: Ladies and gentlemen, we conclude the earnings call for September quarter. Thank you very much for your participation. If you have any follow-up questions, please contact our IR team. I wish you a wonderful weekend. Thank you. [Statements in English on this transcript were spoken by an interpreter present on the live call.]