Pop Mart Shares Fall as Q3 Revenue Drops 45-50% Year-On-Year
Pop Mart shares continue declining after Q3 revenue drops 45-50% year-on-year, raising concerns about long-term growth.
At a glance
- Pop Mart shares fell further after reporting a 45-50% year-on-year drop in third-quarter revenue.
- The decline was sharper than the expected 30% drop, with regional sales in Americas and Asia-Pacific falling 70-75% and 65-70% respectively.
- Brokerage Jefferies cut earnings estimates for 2027 and 2028 by 9-12% due to weaker overseas sales.
Pop Mart, the Chinese toymaker behind the Labubu doll, saw its shares fall further as third-quarter revenue plummeted. The company reported a 45-50% year-on-year drop in Q3 revenue on Tuesday, according to a filing. This decline was sharper than the 30% drop that had been expected, raising concerns about whether the Labubu frenzy can sustain the company's rapid growth.
The sharp sales decline was particularly steep overseas. Revenue in the Americas plunged 70-75%, while Asia-Pacific sales dropped 65-70%. Mainland China saw a 25-30% decline, and Europe and other regions recorded a 50-55% drop. Despite these figures, the results were broadly in line with buy-side expectations, though the company's profitability is under pressure.
The decline raises questions about the sustainability of the Labubu and collectible toy frenzy in overseas markets. Fourth-quarter revenue is expected to rise 3% from the previous quarter but remain 34% below year-earlier levels. Brokerage Jefferies cut Pop Mart's earnings estimates for 2027 and 2028 by 9-12%, citing pressure on profitability from weaker overseas sales.
Pop Mart is continuing its global expansion with a greater focus on flagship locations in cities including New York, Milan, and Paris. The company is also diversifying its intellectual property portfolio beyond Labubu, with titles like SKULLPANDA, Hirono, and Twinkle Twinkle gaining traction in overseas markets.
Questions and answers
- What was Pop Mart's third-quarter revenue decline?
- It dropped 45-50% year-on-year, sharper than the expected 30% decline.
- How did regional sales perform in Q3?
- Americas revenue fell 70-75%, Asia-Pacific 65-70%, mainland China 25-30%, and Europe 50-55%.
