Miniso Group's performance for the first half of 2024 has been released. During the reporting period, the group achieved a revenue of 7.759 billion yuan, a year-on-year increase of 25%; The profit attributable to equity shareholders was 1.17 billion yuan, a year-on-year increase of 16.4%; Adjusted net profit was 1.242 billion yuan, a year-on-year increase of 17.8%.
From a regional perspective, Miniso Group's revenue from mainland China in the first half of the year was 5.027 billion yuan, a year-on-year increase of 17.2%; Revenue from overseas markets was 2.732 billion yuan, a year-on-year increase of 42.6%, with overseas growth rate significantly higher than domestic growth.
At present, Miniso Group has incubated two brands, Miniso and TOP TOY. As of June 30, 2023, the total number of stores for Miniso and TOP TOY were 6868 and 195 respectively, an increase of 455 and 47 compared to the end of December 2023.
Miniso's Mainland Same Store GMV Negative Growth
Among the more than 6800 Miniso stores, 4115 are located in mainland China, accounting for about 60%. At present, there are three types of Miniso stores located in mainland China, namely direct operated stores, Miniso partner stores, and agency stores. The number of newly opened and closed direct operated stores in the first half of the year was 7 and 4, respectively; The number of newly opened and closed stores of Mingchuang Partner in the first half of the year were 326 and 141, respectively.
The company listed several reasons for the closure of Miniso stores in its semi annual report, such as the expiration of store leases, increased rent, changes in the layout of the shopping mall, inability to generate profits, and other considerations by partners. At the end of 2020-2023 and the end of June 2026, the overall closure rates of Miniso's stores in mainland China were 3.6%, 3.5%, 2.6%, 1.6%, and 3.6%, respectively.
From the perspective of store operation data, the total GMV (i.e. "total merchandise transaction volume") of Miniso stores in mainland China in the first half of the year was 7.097 billion yuan, an increase of 15.59% compared to the same period last year; But the growth rate of same store GMV was -1.7%, compared to 28.1% in the same period last year; The total GMV of TOP TOY stores in the first half of the year was 521 million yuan, a year-on-year increase of 41.2%, but the same store GMV growth rate was 13.6%, which was also lower than the 23.2% in the same period last year.
From the perspective of urban distribution, as of June 30, 2024, the number of Miniso stores in first tier cities in mainland China increased by only 67 compared to the same period last year; The number of stores in second tier cities, third tier or lower tier cities increased by 209 and 235 respectively compared to the same period last year.
Industry insiders say that the incremental contribution of store quantity will decline with the expansion of enterprises, and the growth of same store sales is the "fundamental" for sustainable development of enterprises. Ye Guofu, founder and CEO of Miniso, said at the financial report communication meeting, "Domestic business will increase sales through product structure adjustment, upgrading stores, and building flagship stores
Plan to open approximately 550 to 650 new stores overseas every year
The domestic market is under pressure, and Miniso has set its sights on overseas markets. Both Miniso and TOP TOY have experienced the fastest opening of stores in the first half of the year in history.
As of the end of June 2024, Miniso has 2753 overseas market stores, of which 343 are directly operated stores and 2410 are operated stores under Miniso's partnership and agency models.
From a regional distribution perspective, the number of companies in Asia, North America, Latin America, and Europe is 1484, 234, 584, and 244, respectively. In addition, Miniso recently announced that starting from 2024, the company plans to open approximately 550 to 650 new stores overseas each year.
However, can increasing the number of global stores solve the short-term performance growth bottleneck of the group? Data shows that in the first half of the year, the total GMV of Miniso's overseas market was 6.401 billion yuan, a year-on-year increase of 41.05%. However, the growth rate of same store GMV declined to 16.3%, compared to 32.1% in the same period last year.
In addition, Miniso's overseas companies have frequently fallen into bankruptcy crises. In 2018, Miniso filed for bankruptcy just over a year after entering the Canadian market. According to court documents, Miniso Canada owes over $20 million.
According to relevant media reports, the Australian subsidiary of Miniso has appointed Jirsch Sutherland as its bankruptcy administrator again on May 13, 2024, following its restructuring in 2020. This is the second time the company's Australian subsidiary has faced difficulties. It is reported that local management of Miniso Australia attempted to discuss with its parent company in Guangzhou whether it could provide assistance to the struggling Australian company.
Sales and distribution expenses increased by 66% year-on-year
Miniso is crazily opening stores to "capture land", and the related costs are constantly increasing. In the first half of the year, Miniso Group's sales cost was 4.369 billion yuan, a year-on-year increase of 16.5%; Sales and distribution expenses amounted to 1.522 billion yuan, a year-on-year increase of 65.8%; General and administrative expenses amounted to 419 million yuan, a year-on-year increase of 30.9%.
In the mid-term performance announcement, Miniso also disclosed a "securities class action lawsuit". In August 2022, Miniso and several senior executive level directors (referred to as the "defendants") were sued in a presumed federal securities class action, alleging that the defendants violated the 1993 Securities Act and the 1934 Securities Exchange Act by making misleading statements or omissions in the company's business operations and finances.
According to the disclosure, the selection process for the lead plaintiff in the above-mentioned lawsuit was completed in November 2022, and a revised complaint was subsequently submitted. In February 2024, the court approved the defendant's motion to dismiss and allowed for modifications. The plaintiff filed a motion in March 2024 requesting the court to reconsider the judgment, and the defendant responded promptly. The plaintiff's motion for reconsideration is still pending. Miniso stated that as the case is still in its preliminary stage, it is impossible to predict the outcome of the lawsuit or estimate potential losses.