MINISO Group Holding Ltd. Q4 FY2024 earnings call

Management Statement and Operational Highlights

• 2024 Achievements: By the end of December 2024, group store total account reached 7,780 with net increase of 1,219 stores of the year. MINISO China added 460 stores, MINISO Overseas expanded 631 stores and TOP TOY grow by 128 stores. Global revenue grew by 23% to approximately RMB17 billion, overseas revenue accounted for 39% of total revenue.
• Domestic Business: 2024 domestic businesses achieved double-digit growth on top of 36% growth in 2023, offline grew by 10%, e-commerce grew by 25%. Confident about accelerating growth in 2025 with growth drivers including optimizing channel and retail partner structure, precise product matching, leveraging IP collaboration matrix, and enhancing member loyalty and repurchase rate.
• Overseas Business: 2024 overseas revenue reached RMB 6.68 billion, growth 42%, GMV reached RMB14.16 billion, growth 27%. Added 631 overseas stores, US market as strategic stronghold with triple-digit compound growth from 2021 to 204, added 154 stores in US in 2024. European market showing potential, UK market leveraged IP strategy for channel upgrade.
• TOP TOY: 2024 marked first year of full year profitability, effective implementation of product differentiation strategy, gross margin improvement, self-developed product share increase.
• YH Acquisition: Acquisition of 29.4% equity stake of YH completed, YH transaction's five requisite met, deal successfully completed.

Segment Performance

• MINISO China: In 2024, domestic businesses achieved double-digit growth on top of a 36% high growth rate in 2023, with overall revenue growth of 11%. Offline grew by 10%, e-commerce grew by 25%. By the end of December 2024, stores in China reached 4,386 with a net increase of 460 stores throughout the year. Revenue from MINISO mainland China was RMB9.3 billion, grew by 11%.
• MINISO Overseas: In 2024, overseas revenue reached RMB 6.68 billion, representing 42% growth. GMV reached RMB14.16 billion, grew by 27%. Added a net total of 631 overseas stores, with the majority of expansion in the United States and Indonesia. The US market has emerged as a strategic stronghold, with 154 stores added in 2024, bringing the total to 275 locations across 47 states, concentrating expansion on 24 states representing 76% of the US population.
• TOP TOY: In 2024, TOP TOY delivered 45% to growth, net increased by 128 stores, achieved good profitability of the year. Gross margin improvement was 7.3%. Key categories like Building Blocks and Blind Box saw significant margin improvement. Self-developed product increased the share by 3.5 percentage points.

Guidance

• 2025 will continue dual-pronged approach: drive high-quality growth in China by enhancing same-store sales, improving member repurchase rate, and upgrading channel structure; maintain focus on overseas market development with disciplined cost control while sustaining rapid growth.
• Store expansion: Number of new stores in 2025 expected to be slightly less than 2024, focusing on store quality rather than just quantity.
• Revenue: Optimistic about accelerated revenue growth in 2025, pace of revenue growth likely lower in H1 and higher in H2.
• Operating profit: Expect healthy growth in operating profit in 2025, directly operated stores in high-growth period but mid and long-term operating margin expected to reach around 20%.
• Supply chain and pricing: Accelerate supply chain globalization, consider price adjustment while maintaining GP margin objective, maintain strong negotiation leverage with suppliers.

Risks

• Global economic uncertainty increase, particularly policy changes from the US tariff.
• Geopolitical complexity bringing tariff impact and rising cost risks.
• Directly operated stores in early-stage investment may have low profit or margin in first year due to high-growth period.
• Challenges in supply chain adjustment.

Q: Michelle Cheng asked about same-store performance in China, contribution of famous IP in Q3 and Q4 2024, and specific targets for domestic business; also about same-store sales in US and GP margin improvement in overseas market.

A: Guofu Ye responded that from January to February, offline store revenue growth was high. For China, will rectify small stores into larger ones, take IP Land as key strategy, launch signature stores in primary cities, and continue to improve existing stores. For overseas directly operated stores, foresee triple-digit growth in 2025, GP margin has huge room for progress, US market will have refined store opening strategy.

Q: Wei Xiaopo asked about outlook of margin in 2025 and progress of YH business.

A: Eason Zhang said margin performance dependent on directly operated stores, long-term operating margin expected to reach 20% for directly operated stores. Guofu Ye mentioned YH has three increase and two reduction initiatives, aiming to improve manpower efficiency, store performance, and reduce cost and labor cost.

Q: Anne Ling asked about store opening target in 2025, number of new stores in China and overseas, and impact of introducing third-party products on same-store sales and profitability.

A: Guofu Ye said 2025 new store number flat with 2024, focus on store quality. Eason Zhang added about new store plan in US, Canada, Southeast Asia, Europe. Guofu Ye said introducing third-party products helps improve diversity of portfolios and offerings, can help improve same-store sales.

Q: Samuel Wang asked about new IP plan in 2025, progress with Sanrio and Disney, and dealer integration progress.

A: Guofu Ye said 2025 has more than 90 IP-related events and products, working with Sanrio and Disney on vinyl and plush products, continue to optimize retail partner structure, allocate resources to potential partners, and mitigate negative impact from integrated retail partners.

Q: Lucy Yu asked about online business in China contribution in 2024, plan for 2025, and China offline business growth.

A: Eason Zhang said online business in China in 2024 accounted for around 15% of total China business, will continue to expand online sales. For China offline business, double-digit growth expected, focus on same-store sales improvement, leverage store size and location for better performance.