Pop Mart (9992.HK) Q3 Sales Fall 45%-50%, Shares Drop Over 30% in 2023
Published on · Source: cnbc.com
AI Summary
Summarized by AI from the source belowPop Mart, a Chinese toymaker known for its Labubu dolls, reported a 45% to 50% year-on-year drop in third-quarter revenue. Shares fell nearly 2% after earlier declining more than 6% on Wednesday, extending a 30% drop so far this year and finishing lower in nine of the last 12 sessions.
The revenue decline was steep across regions: Americas sales plunged 70% to 75%, Asia-Pacific sales fell 65% to 70%, mainland China revenue declined 25% to 30%, and Europe and other regions dropped 50% to 55%. These results were worse than the earlier estimate of a 30% revenue decline but matched buy-side expectations. Jefferies lowered earnings forecasts for 2027 and 2028 by 9% to 12%, citing profitability pressure from weaker overseas sales.
Despite the decline, Pop Mart plans to expand stores globally with flagship locations in New York, Milan, and Paris. The company is also diversifying its product portfolio beyond Labubu to other brands like SKULLPANDA, Hirono, and Twinkle Twinkle. Fourth-quarter revenue is forecasted to rise 3% sequentially but stay 34% below last year's levels, according to Jefferies. This ongoing sales slump and guidance impact Pop Mart's near-term growth prospects and profitability for investors.
Informational only, not financial advice. Content is AI-generated and may contain errors. How this works.
Our take
Opinion from the Newsstocks AI desk, not investment adviceWe think the sharp revenue decline and regional weaknesses signal challenges for Pop Mart's growth, especially overseas. While store expansion and product diversification offer some support, the lowered earnings forecasts point to continued headwinds. This negative revenue trend and forecast cuts are likely influencing the share price decline. A reversal would require stronger sales and improved profitability.
Key numbers
- Q3 Year-on-Year Revenue Drop
- 45% to 50%
- Americas Sales Decline
- 70% to 75%
- Asia-Pacific Sales Decline
- 65% to 70%
- Mainland China Sales Decline
- 25% to 30%
What could help
- Pop Mart is expanding flagship stores globally in top cities, potentially increasing market presence.
- The company is diversifying its product range beyond Labubu to other intellectual properties gaining overseas traction.
What could hurt
- Significant sales decline in key overseas markets like Americas and Asia-Pacific could limit revenue growth.
- Lowered earnings estimates for 2027 and 2028 signal ongoing profitability pressure from weaker overseas sales.
What to watch next
Pop Mart's fourth-quarter revenue, forecasted to rise 3% from the previous quarter but remain 34% below last year, will be a key indicator.
The background
Companies report quarterly earnings to show financial performance over three months. Revenue drops can indicate weaker sales or demand, affecting stock prices.
Questions readers ask
How did Pop Mart's sales perform in different regions in Q3?
Q3 sales fell 70% to 75% in the Americas, 65% to 70% in Asia-Pacific, 25% to 30% in mainland China, and 50% to 55% in Europe and other regions.
What are Pop Mart's plans to address the sales decline?
Pop Mart plans to expand flagship stores globally and diversify its product portfolio beyond Labubu to brands like SKULLPANDA and Hirono.
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