MINISO Group Q2 2026 Earnings Report

MINISO Group EPS Results

• Actual EPS: N/A
• Consensus EPS: $0.31
• Beat/Miss: N/A
• One Year Ago EPS: N/A

MINISO Group Revenue Results

• Actual Revenue: N/A
• Expected Revenue: $852.71 million
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

MINISO Group Announcement Details

• Quarter: Q2 2026
• Date: 8/28/2026
• Time: Before Market Opens
• Conference Call Date: Friday, August 28, 2026
• Conference Call Time: 5:00AM ET

MINISO Group (NYSE:MNSO) Holding Limited is a global value retailer that operates the MINISO brand of lifestyle product stores. The company offers a broad range of merchandise, including household goods, personal care products, beauty accessories, electronics, toys, stationery, food and beverages, fashion accessories, and seasonal products. Its retail model emphasizes affordable prices, frequent product updates, and collaborations with popular intellectual property brands.

Founded in 2013, MINISO has expanded from its origins in China into an international retail business. The company serves customers through stores and other retail channels across China and numerous overseas markets, including locations in Asia, North America, Europe, Latin America, the Middle East and Africa. Its store network includes company-operated and partner-operated locations, depending on the market.

MINISO also operates TOP TOY, a specialty retail brand focused on collectible toys and related products. The company is led by founder Ye Guofu, who serves as chairman and chief executive officer. MINISO Group is incorporated in the Cayman Islands, with its American depositary shares listed on the New York Stock Exchange under the symbol MNSO.

MINISO Group Q2 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Strong H1 growth was led by China: Revenue rose 22.4% to RMB 11.5 billion, with MINISO China revenue up 26.2% and operating cash flow increasing 46%. China’s larger-store formats, renovations, proprietary IP and membership program all contributed to higher per-store productivity.
• Positive Sentiment: Proprietary IP is emerging as a growth engine. YOYO generated nearly RMB 500 million of H1 revenue, while group proprietary-IP sales surpassed the RMB 1 billion target ahead of schedule; new IP Chou Chou also reportedly sold out rapidly. TOP TOY revenue increased 32.7%, with its NOMI IP exceeding RMB 300 million in cumulative GMV.
• Negative Sentiment: Overseas execution weighed on profitability. Distributor revenue declined, directly operated markets outside North America remained in the investment stage, and overseas inventory turnover worsened to 273 days from 240 days. Management plans to close 100–110 distributor stores and reduce total overseas store count by 50–70 in H2.
• Negative Sentiment: Full-year profit guidance was downgraded. Excluding foreign-exchange effects, adjusted operating profit is now expected to decline by high single digits, with operating margin down 3–4 percentage points year over year versus the prior expectation of a 1–2 point decline. Management expects H2 revenue growth to slow to high single digits, primarily because of weaker overseas distributor revenue and a flat TOP TOY outlook.
• Positive Sentiment: The company returned RMB 1.31 billion to shareholders in H1 through dividends and buybacks, including RMB 520 million of repurchases, and plans substantial additional buybacks. Management reaffirmed a full-year shareholder-return target of at least 50% of adjusted net profit, excluding foreign-exchange effects.

Presentation

[Operator]

Hello, everyone. Thank you for your patience, and welcome to MINISO 2026 Interim Earnings Result Presentation. All participants are currently in listen-only mode. Following the management remarks, we will host the Q&A session. Before asking your question, please state your name and the institution you represent. Please note the event will be recorded. English simultaneous translation will be available for this call. You can select your preferred language by clicking Interpretation in the Zoom meeting. We released our Q2 and the interim results of 2026 earlier today, which is now available on our ir.miniso.com. Joining us here today are Founder and CEO, Mr. Ye Guofu, and our CFO, Mr. Zhang Jingjing. Right before we continue, please refer to your safe harbor statement in our earnings press release, which also apply to this call, as we are making forward-looking statements.

[Operator]

Please also note, we will discuss non-IFRS financial measures today, which has been expanding our earnings release and referring to SEC and Hong Kong Stock Exchange, and reconciling to the most comparable measures reported under IFRS. Unless otherwise stated, all figures are in RMB. In addition, we also prepared PPT slides containing financial and operational information for today's call. If you are using Zoom, you can see the information. You can also preview it later on our IR website. Now, I would like to welcome Mr. Ye.

[Ye Guofu, Founder and CEO at MINISO Group]

Hello, everyone. In H1, MINISO Group revenue reached CNY 11.5 billion, up 22.4%. EPS grew 8.2%, and operating cash flow rose 46%. Our global store accounted 8,674. MINISO today stands at a pivotal moment as we operate a larger and better store, building our own proprietary IP and develop our overseas organizational capacity. Opportunities and challenges coexist.

[Ye Guofu, Founder and CEO at MINISO Group]

I firmly believe the strategic direction and the stage-by-stage significance of those initiatives matter far than the near-term number. I will walk you through our business performance this quarter across three segments, including MINISO China, MINISO Overseas, and TOP TOY. Official data show that China total retail sale of the consumer groups grew by 1.3% on YoY basis in H1 of this year. Against this micro backdrop, MINISO China H1 revenue grew by 26.2%, not only far outpacing broad retail sales, but also exceeding our private guidance. This was our fastest H1 growth rate in the past three years. Importantly, the quality of the growth is truly high, driven primarily by the mid and high single-digit growth number.

[Ye Guofu, Founder and CEO at MINISO Group]

On the channel side, as of the end of 2022, the Q2, MINISO China store count reached 4,665, with a net addition of 97 stores in H1, among which Land format store net addition 59, flagship format store 159. Regular store record a net closure of 121. On August 22nd, MINISO Land Chengdu Eastern Suburb Memory Store officially opened, marking our 100th Land store here in China. Store count number was growing solid, but the quality is even more important. At the end of June, our China store count was up 8%, while the revenue grew by 26%, reflecting a substantial increase in per-store output and healthy growth in the overall sales per square meter. I'd like to show you three sets of the data. First of all, sale per square meter and the rent ratio varied each month.

[Ye Guofu, Founder and CEO at MINISO Group]

The Land format store delivers sales per square meter roughly twice as that of the regular store. Compared with existing stores, the store newly opened in 2026 are significantly larger, yet the sales per square meter held steadily with the rent to sales ratio improved. To most, our new store format is no longer a mere tenant, but also the engine for foot traffic. Secondly, our store renovation pace continued to accelerate. We completed 189 store renovation in H1. Post-renovation store performance has been doubled YoY. Against a full-year renovation target of 355, we have every confidence to exceed it by the end of this year. Thirdly, franchise return continued to improve, whether measured by the payback period, the profit margin, or proportion of the profit store. The profitability of the MINISO Land worldwide and MINISO store nationwide in H1 reached its best level since 2019.

[Ye Guofu, Founder and CEO at MINISO Group]

Franchisees are increasingly willing to open larger and better store, which is the most direct endorsement for our channel strategy. From swapping the cage to bring the better birds or large store-driven growth, our channel upgrade strategy has underway for two years, and remains significantly for the future. This assessment with the two facts. First, the proportion of the renewed store in China remain low, and second, we continue to innovate on the store format. This year, we introduced a new member to our store matrix that is Super MINISO, the most important innovation of 2026. Looking back to the evolution of our channel upgrades over the past two years, in 2024, MINISO Land validated the IP immersive flagship store. In 2025, MINISO FRIENDS entered into mid and high-end shopping districts in the affordable luxury tiering.

[Ye Guofu, Founder and CEO at MINISO Group]

In 2026, Super MINISO brought the IP experience to the broader mass consumer base. Its product matrix was 50% IP merchandise plus 50 general lifestyle products. Since its launch, it has become one of the most popular store formats among the consumers. The clever aspects of our Super MINISO is not overturn the consumer existing brand perception, rather is build upon them and retain consumers familiarity with MINISO. Value for money merchandise, we're injecting freshness and the trait-driven experience through IP. Other formats like FRIENDS, Land, and Space progressively deepen the IP merchandise and might share, helping consumer move from lifestyle general merchandise to IP wonderland as part of the brand upgrade. But I'd like to say the success of the large store is not merely channel innovation, it's a systematic innovation by having content plus space and operation. The store is a space.

[Ye Guofu, Founder and CEO at MINISO Group]

IP is a soul to fill it. The momentum of the larger store and value of the IP reinforce each other, forming an ever-accelerating flywheel. In June last year, we launched YOYO, our first proprietary IP. Within just one year, YOYO has entered into 53 countries worldwide, generating nearly CNY 500 million in related revenue in H1. The most iconic milestone was YOYO plus Disney Toy Story 5 collection. YOYO version of Woody, Buzz Lightyear, and the Slinky Dog sold strongly across stores in multiple countries. In just one year, YOYO success has propelled its validated proprietary IP to a new stage where it can engage top-tier global IP as an equal. Beyond the MINISO flagship store and brand, the TOP TOY has also built its own IP metrics. Its flagship IP, NOMI, has surpassed CNY 300 million in cumulative GMV.

[Ye Guofu, Founder and CEO at MINISO Group]

And you can see that while YOYO validated the methodology within our flagship brands, NOMI, YOYO, and DUIDUI has proven different style under the TOP TOY brand. Around proprietary IP, we have accumulated a full-chain SOP, standing artist, signing product definition, design to development, supply chain scheduling, all the way to the pre-launch standing default channel, in-store events, and fan operation. Our group-wide target of CNY 1 billion in proprietary IP sales, set at the beginning of this year, was achieved ahead of the schedule by the end of July. This all proven our multi-IP, multi-category globalization strategy is successful. They fully demonstrate MINISO's unique resources endorsement in building proprietary IP. We have the full category coverage, all channel penetration, global footprint, and full chain operation. Looking across the globe, MINISO only imposes the greatest flexibilities and expandabilities in product categories.

[Ye Guofu, Founder and CEO at MINISO Group]

The strongest control and innovation capacity in channel, the boldest and the highest quality global store network in terms of the footprint. On the operation front, MINISO leverages full chain advantage from signing scientists to design to development to marketing and selling product. We deeply empower artists at every stage, maximize the potential of each IP. Those are precisely MINISO's highly differentiated and scarce resources, and they are also the key to MINISO's leap forward development and overtaking the proprietary IP. There are four fulls enable us to complete the entire process from IP concept to shelf more efficiently than the vast majority of the companies. Everyone, YOYO is just the beginning. On August 22nd, we newly launched artist IP, CHOUCHOU, sold out entirely on its debut day, far exceeding expectation. We have already signed multiple designer toys.

[Ye Guofu, Founder and CEO at MINISO Group]

You can see on the evening of 26th, 5,000 sets of CHOUCHOU was sold live within one second. At the same time, we have already signed multiple designer toy artists, recruiting top creative talents worldwide through our IP Protégé program. Our ambition is going forward, leading 100 Chinese IP onto the global stage. At the moment, global IP market is entering into unprecedented boom. The rise of the great nation is inevitably accompanied by the birth of the culture symbol and their global accident. MINISO, we are backed by our world-leading channel, product, and IP operation to secure our top position in this historic moment. Our vision is to become the world's leading IP operating platform.

[Ye Guofu, Founder and CEO at MINISO Group]

Measured by channel scale, we are already the world's largest retailer of the IP products, and our proprietary IP business is building a new growth engine that is at once distinctive, explosive, and replicable. Our strategic pivot towards proprietary IP is a long-term choice grounded in the trend of our era, where we will sustain long-term investment. Even in the short term, the proprietary IP product line has delivered excellent report card. We not only have YOYO proven to be success, same as CHOUCHOU, our second IP. In its H1, profit margin was above company average. Inventory turnover was kept within 30-40 days. Proprietary IP strategy has placed no pressure on overall profitability, laying a solid foundation to continue our IP ecosystem. Coming next, I am going to talk about membership strategy. Last year, I said membership would become another important engine for MINISO growth.

[Ye Guofu, Founder and CEO at MINISO Group]

The value of the strategic membership is steadily materialized. Member scale and contribution continue to reach new level. In H1, our China membership grew by 31%, reaching 130 million, the all-time high. Member contribution sales rose to 57% in the same period of last year to 60% for the full year last year and 33% in Q1 and further 77% now, where at the same time membership is the latest evidence of MINISO's growth shifting from the opportunity-driven to the system-driven. The value of the membership manifested in two sell sides. The core engine of the lifting average transaction value. Average transaction value rose by 5%. Working with global IP, for example, like Sanrio, Disney, and Harry Potter, as well as Chiikawa, combined with the blockbuster effect of our proprietary IP, large store has become the core stronghold of the high-value members.

[Ye Guofu, Founder and CEO at MINISO Group]

As a result, our customer contribution of China member was two times higher of the non-member. Average transaction value of IP member is more than three times of the non-IP members. Secondly, the top-level engine to improve the retention. Through the precise targeting and benefit-driven retention that can help to further extend the active lifetime. Our precise identification of the member consumption preference and category needs enable new product to reach targeted consumer efficiently, will upgrade the benefits such as the cash paybacks credit turn into the purchase into direct momentum for the next purchase. IP member newly acquired in 2025, the retention rate in H1 of this year was 80% point higher than the non-IP members, with purchase frequency two times higher than the non-IP members. Member who use cash back credit repurchase 1.6x frequent than those non-members.

[Ye Guofu, Founder and CEO at MINISO Group]

IP-driven acquisition and large store quality upgrade and repurchase extension is our underlying formula to achieve highly sustainable membership value. When we have scale structure and frequency driving together, they would be able to sustain the long-term success. Let's also take a look at the overseas market. In H1 of this year, overseas revenue grew by 40.9% to CNY 4.06 billion. Store number accounted for 3,644. Frankly speaking, overseas performance fell short of our expectation, weighted somewhat our group profit. The overseas contribution to company profit declined from 35%-40% in 2023 to 10%-50% in H1 of this year. The impact are coming from two factors. First of all, a decline in distributor business revenue, and secondly, our direct operated market outside North America still remain in early investment stage. The store model are still in the refinement and not yet profitable.

[Ye Guofu, Founder and CEO at MINISO Group]

We also made some internal review for those issues. Expanding our overseas directly operated store, we will be more focused and more prudent, vigorously assessing ROI of the new stores, concentrating resources to deepen our presence in priority markets. I ask them to slow down the pace of the store openings, unless you have 100% confidence. In H2, we will first concentrate on operating our existing 800 existing overseas directly operated store and replicate after a single store model matures. Overseas market is our vast horizon. Short-term fluctuation won't change our long-term growth trends. We have corrected our past growth approach that overemphasized on scale and store count, so that the terminal sales growth, inventory turnover, and headquarter shipment once again would form a closed loop in a healthy way. You know that now it is also the time for us to really improve the performance in overseas market.

[Ye Guofu, Founder and CEO at MINISO Group]

Our overseas business is now in the holding stage. We would like to make sure we refine our store model, and more importantly, we need to make sure the China transformation will be successfully validated in the international market. It is actually the time for another upgrade for the international market. For that reason, we have already made significant adjustment and transformation for international business. I would like to take this opportunity to encourage our overseas teams. From 2015 to now, our overseas journey has been spanned 11 years. The deeper we go for overseas, the more profound I can realize how difficult it is for a Chinese company to truly gain a solid foothold and earn sustainable profit abroad. It was not a product strength and supply chain, it also organizational capacity, management control model, and localization strategy. MINISO overseas business has been profitable from day one.

[Ye Guofu, Founder and CEO at MINISO Group]

Yet, we must recognize overseas challenges today are precisely a sign that MINISO globalization has entered into deep water stage. As a share of the direct operated business rise, we must settle again and pursue refined operation, localization, stronger organizational capacity, and a globalized management control model while solidifying our management fundamentals. We see many international consumer brands entered into China, did well in the past one decade, but started incurring losses in recent years. No matter international brands come to China or Chinese brands go for international market, we have to be adaptive. Otherwise, profit would be nothing to be talked about. This is also the so-called secondary upgrading and transformation every company need to have faced if they go for internationalization. MINISO China transformation over the past few years achieved a great success. We have preliminarily realized brand upgrade and business model iteration.

[Ye Guofu, Founder and CEO at MINISO Group]

China business started to burst with fresh vitality. The challenge we are facing for overseas business today is essentially the same as China three years ago, shifting from the scale first to quality first. Over the past three years, China delivered its transformation report card from landing grabbing expansion to wonderland style upgrade, and then the refined operation. This methodology applies equally to overseas market. We are never short of the product supply chain or channel. What we lack of is more patience to fully refine the single store model. Going global is a marathon. Every adjustment and every investment we made today lays a solid foundation for the long-term value. Every additional food store MINISO open overseas, every additional consumer well-served, every additional member accumulated brings us one step closer to our vision of becoming a world's leading IP operating platform. I have faith in my overseas team.

[Ye Guofu, Founder and CEO at MINISO Group]

Give them time, give them patience. I believe that overseas market tomorrow will surely be better than what we have today. Coming next, please allow me to talk about TOP TOY. In H1, TOP TOY revenue was grown by 32.7%, global store numbers 365, including 48 overseas. This quarter, TOP TOY first U.S. store is being located in Times Square of New York, making it the first China designer toy brand entered into the crossroads of the world. In H1, proprietary IP accounted for 10% of TOP TOY sales, with proprietary IP metrics continuing to expand. We have some pop-up events that are quite popular, especially YOYO. Especially in Hangzhou debut. A single month GMV is already more than 50 million. Coming next, I am going to welcome Eason to walk us through the financials in H1 of this year, please.

[Eason Zhang Jingjing, CFO at MINISO Group]

Okay, thanks for Mr. Ye.

[Eason Zhang Jingjing, CFO at MINISO Group]

Now, I will walk you through our key financial metrics. Today, rather than going through the financial lines by line, I will offer some explanation on several data points that are top of mind for you. First of all, let's review how we performed against H1 2026 guidance we gave to you in the May earnings call. H1 revenue, which is in line with the China same-store guidance, but not that for the North America market. H1 revenue grew by 22.4%, slightly ahead of our guidance; that is 20%-22%. On that, China revenue grew by 26.2% in H1, with Q2 in particular grew by 23%, versus our earlier expectation of only a low double-digit growth in China for Q2. This upside in China came from two factors. First of all, an accelerated channel upgrade.

[Eason Zhang Jingjing, CFO at MINISO Group]

China saw a net addition of 25 stores in Q1, but 72 in Q2, far exceeding our projection of around 40. Secondly, the sales contribution from proprietary IP, especially YOYO. China same-store sale also achieved the guided mid-single digit growth, where for YOYO, the proprietary IP, saw a very good growth. As Mr. Ye has already mentioned, for the short run, our proprietary IP delivered excellent result. The profit of our proprietary IP product is higher than the company's average level, and the inventory turnover has been controlled within 30 to 40 days. But for sure, 30 and 40 days may still be short of the supply now; we're improving. In that way, proprietary IP is not pressure on our overall financial of the company. Overseas revenue grew 15% in H1, below our guidance of a high double-digit growth.

[Eason Zhang Jingjing, CFO at MINISO Group]

The main reason was a 10% decline in distributor business revenue, and both Asia and the Latin American markets experienced temporary revenue declines. As I have already shared with you, North America mid-single digit same-store sales growth came in below our private guidance of the high single to low double digits, largely because we see the weakening of the same-store performance in North America in June. I will walk you through the reason later. Adjusted operating profit excluding the forex gains and loss, grew by 5% on worldwide basis, slightly below our earlier projection of the high single-digit growth, mainly due to the decline in distributor revenue, a high margin part of our business. In H1, MINISO overseas offline GMV grew by 40% year-over-year basis to CNY 8.29 billion. The revenue grew by 50%, reaching CNY 4.06 billion. Let me just break down by region.

[Eason Zhang Jingjing, CFO at MINISO Group]

First of all, let's take a look at Asia. In H1, Asia terminal GMV grew by low single digits year-over-year, while revenue declined a low single digit year-over-year. Markets such as Indonesia, India, and the Philippines were the main driver, weakening on Asia overall performance. Objectively speaking, those markets are facing micro challenges, but it is undeniable that our localized operating capacity still have some further room to improve. Our localized understanding of the market shifts and the product channel matching are not deep enough. Our merchandise planning, channel strategy, and terminal execution are not as efficient as what we have made in China business. At the same time, we proactively cleaned up a bunch of underperforming low-efficiency stores. For example, in markets such as Philippines, we closed the stores with outdated formats and persistently weak output, which had some short-term impact on the revenue.

[Eason Zhang Jingjing, CFO at MINISO Group]

This cleanup of the low-efficiency store in overseas distributor market will continue for another two quarters. We can also see that for markets like Vietnam, following an earlier phase of the higher-end store closure and the product mix adjustment, it already started to show improvement in H1 of this year. Its efficiency has been continued to improve, the best in the past three years. Vietnam same-store sale grew by 20% in Q2 with continued positive growth momentum. This shows our future direction is correct. Going forward, we will continue to deepen our understanding of the Asian market, enhancing our localized operating capacities in market-specific manner, focusing on channel upgrades and product mix adjustment, actively explore the product assortment and the price brands adapting to the change of the local consumption market. Let's talk about Latin America.

[Eason Zhang Jingjing, CFO at MINISO Group]

In H1, Latin America terminal GMV grew by high single digit YoY, but revenue declined by low double digit YoY. These were several reasons for this divergence. For example, a number of the core market, including Colombia, faced multiple external challenges such as political volatilities, rising freight cost, natural disaster, which had a fierce impact on the overseas orderings and the shipments. However, the terminal demand remained resilient. For example, the top four Latin American countries contribute 80% of our performance here. All delivering solid terminal GMV growth in H1, with Mexico also post high single-digit growth, excluding the forex impact. Actually, if you use the local currency, the Mexico local GMV was grown by nearly 20%. As external adjustment disruption fading away, we have our confidence for the long-term development. The third part would be the North America market.

[Eason Zhang Jingjing, CFO at MINISO Group]

North America market in H1, revenue grow by 37%, reaching close CNY 1.8 billion, broadly in line with our expectation, with a mid-single-digit same-store growth. By Q2 quarter, Q2 revenue grew moderately slightly to 25%, where two-year CAGR hold at around 50%. However, in Q2, the two-year CAGR was still around 50%, five, zero, resilient performance against the high base. The moderation was mainly due to three factors. First of all, a temporary gap in the cadence of the IP product launches. North America has a high share of the IP product and is therefore more sensitive to the IP launch cadence. In H1 of this year, we didn't maintain a sufficiently steady launch frequency, which affected the store traffic and conversion to a certain extent. This was providing valuable lesson for optimizing our IP product cadence planning going forward.

[Eason Zhang Jingjing, CFO at MINISO Group]

Secondly, the sale share of the locally directly sourced product in the U.S. market used to exceed 50%, but not fully in line with our plan at the very start of this beginning. Earlier this year, against the backdrop of the tariff policy changes, we set out to control and gradually reduce the share of the overseas direct sourcing. You can see the direct sourcing are focusing on the category that are not operated by the headquarter. However, it takes time to adjust the product metrics, which was not being reflected in H1. Going forward, we will further improve the advanced planning of the overseas merchandise. Thirdly, the upfront cost investment for the newly directly operated store. We have a net increase of 75 stores in H1, nearly double the same period of last year.

[Eason Zhang Jingjing, CFO at MINISO Group]

The upfront investment will have some short-term impact on the profitability, but the good news is that the new stores opened for this year deliver significantly higher profit margin and sales per square meter than older ones, outperforming in site selection, quality channel matching. Entering into H2, we will shift our focus to deepen our store operation and running our already opened store deep and through. For the full year, North America and Europe market will still maintain relatively high growth, as for North American store will continue to prove out the success rate. We expect North America will reach close to CNY 4 billion in scale with 10% net margin for the full year. Europe is also a market we are positive on, but it is still in the early stage for direct operation development, so fluctuation is expected.

[Eason Zhang Jingjing, CFO at MINISO Group]

In H1, Europe revenue growth moderated to 26% with the same-store sales down by mid to single digit. Our European team is building organizational capacity, refining the store model. Let us give them the confidence and the patience to allow the market to prove our strategy. In H1 of 2026, MINISO mainland China achieved a mid-single digit same-store growth in line with our expectation, leaving ample room for our full year target of low single digit same-store growth. MINISO overseas same-store sale declined low single digit, with North America achieving a mid-single digit same-store growth. North America same-store performance was quite strong in Q1, grew by 10%, but moderated in Q2. Particularly because the stock-out of the certain best seller, especially the best-selling IP product. We expect this stock-out would be eased in September. In H1 of 2026, the GP margin was 44.3%, flat versus same period of last year.

[Eason Zhang Jingjing, CFO at MINISO Group]

For the GP margin, it was including approximately 0.6 percentage point from the U.S. tariff refunds. For Q2, the GP margin was 45.3%, one percentage improvement compared with last year. This was due to the tariff refunds, which bring 1.2 percentage positive growth. Based upon the refunds received to date, the company expects tariff refund will also have the 20 basis points to 30 basis points support to the overall GP margin for the next two quarters. Excluding the external investment and convertible bonds financing, the profitability of our core business in H1 was as follows: adjusted operating profit was CNY 1.49 billion versus CNY 1.59 billion in H1 last year, down by 6%. Excluding the forex effect, the figures was CNY 1.63 billion and CNY 1.55 billion, grew by 5%. Excluding the forex effect, the adjusted net profit was CNY 1.22 billion and CNY 1.24 billion, down by 1.7%.

[Eason Zhang Jingjing, CFO at MINISO Group]

The corresponding adjusted net margin declined by 2.6% on YoY basis. This was also proving that our selling expense ratio rose 2.7% this period, with last year it was 23.1%. To be specific, rental and depreciation expenses related directly operated store rose from 7.1% of the revenue in the same period last year to 8.1% in H1 of this year, grew by 1%. Advertising promotion expense grew by 2.8%, where regarding IP licensing fees rose from 2.6% in H1 last year to 3.1% in H1 of this year, grew by 0.5%. The increase in the two item largely reflect our strategic investment in proprietary IP. Selling related labor cost rose from 6.8% last year to 7.2% this year, up by 0.4 percentage point. The growth of the above four expenses altogether contribute to 2.6% of the expenses increase.

[Eason Zhang Jingjing, CFO at MINISO Group]

By business unit on this slide, it shows very clearly the main reason for the YOY margin decline was a structural shift in the revenue. For example, in H1 of 2026, the revenue contribution from the high margin franchise and the distributor business, the net profit margin was more than 30%, but it's now fell 6 percentage points. While the contribution from the overseas directly operated business rose by 3 percentage point. However, last year, this number was a single-digit loss. Let's also take a look at the working capitals. Inventory turnover in H1 was 102 days versus 97 days in same period of last year. MINISO China inventory turnover was 67 days, which was 73 days last year. MINISO overseas inventory turnover for international market was 273 days, which was 240 days last year.

[Eason Zhang Jingjing, CFO at MINISO Group]

Going forward, our overseas business must prioritize inventory health and take decisive measures to react to support the inventory. Besides that, in the peak seasons, we have to leverage on the IP launches and the holidays for those sales peaks time, coordinating membership, promotion, and gifting activities to use blockbuster products to drive the monetization of the slow-moving inventory. At the end of June, our cash reserve was CNY 7.39 billion. Net cash inflow of the operating activity in H1 was CNY 1.48 billion, grow by 45.5%. We constantly place high priority on cash flow management. This robust level can also provide solid support for the company's transformation. On shareholder return, in H1 of 2026, the company returned CNY 1.31 billion to shareholder, including dividends and buybacks, of which the company repurchased CNY 520 million, combined with Mr. Ye's personal share purchase, approximately CNY 54 million in H1.

[Eason Zhang Jingjing, CFO at MINISO Group]

Our buyback sale in H1 was already exceeding the full year total of 2025, which fully demonstrate the confidence into the future business. We did not declare any interim dividend this time because of the company believe the current valuation is highly attractive. We will conduct substantial buybacks over the coming period and make a reasonable dividend decision by the end of this year based upon the full-year profit. The company's shareholder return policy for this year is buybacks plus dividends of the no less than 50% of adjusted net profit, excluding forex effect. Looking back on H1, our domestic business exceeding expectation, once again, validating our path for opening large store, building IP, and pursue high-quality development works. Overseas market sustained a compound growth rate of nearly 40%. Now, we are in a transition period from the scale expansion to quality operate.

[Eason Zhang Jingjing, CFO at MINISO Group]

We still need time to build up organizational capacity. Based upon the company's current projection, we expect the company's revenue to grow by high single digit YoY in H2, mid-double digit for the full year. On this, in H2, MINISO China revenue expected to grow by mid-double digit YoY, but overseas revenue will grow by low single digit. Overseas distributor revenue to decline by low double digit. Overseas directly operated business will grow low double digit. TOP TOY revenue is expected to flat in H2, with low double-digit growth for the full year. Compared with our full-year outlook at the start of this year, both domestic revenue and profit are somewhat better, with the differences mainly coming from overseas and TOP TOY. In H2, we'll proactively slow down overseas, continue to close a batch of the low-efficiency distributor store, and also controlling the pace of the directly operated stores opening.

[Eason Zhang Jingjing, CFO at MINISO Group]

We expect a net reduction of 50 to 70 stores across overseas market in H2. A net addition of 40 to 50 directly operated stores, and a net reduction of 100 to 110 distributor stores. For the full year, our guidance for the low single-digit same-store growth for MINISO China and MINISO North America remain unchanged. Excluding forex, the adjusted operating profit is expected to decline by a high single digit YoY. The adjusted operating profit margin expected to decline 3 to 4 percentage point on YoY. Our profit outlook is more cautious than the guidance we gave at the start of this year. When we expected accelerated full-year profit growth versus last year, with an implied margin assumption of a 1 to 2 percentage point decline. However, we now believe it is going to be down by 3 to 4 percentage points.

[Eason Zhang Jingjing, CFO at MINISO Group]

Given the overseas distributor market revenue will decline over the next two quarter, there will be some impact on our margin. This conclude my remarks. Now let's move to the Q&A session.

[Operator]

Thank you. Ladies and gentlemen, please rename yourself as your name plus the institution you represent. Please make sure you limit your question with just one. Now let's welcome Michelle from Goldman Sachs, please.

[Michelle Chen, Managing Director at Goldman Sachs]

Hello, Mr. Ye and Eason. Thanks for giving me the chance to raise a question. I have a question regarding your largest store format in Mainland China. Mr. Ye has already mentioned the large store was performing out of our expectation. We know that for many of the larger store, when they first opened, the performance was pretty well. If the store opening dividend or the first store impact are gradually digested, what would be the normal performance of those larger stores?

[Michelle Chen, Managing Director at Goldman Sachs]

Especially, compared with the normal stores, what would be the difference on the sales efficiencies and the sales per square meter? Whether you have any target in your mind, and you have any criteria in selecting the regions or the sites for those large stores? The questions are mainly regarding the large store format, please.

[Ye Guofu, Founder and CEO at MINISO Group]

Thank you. Let me just start with my overall view. The larger store model continues to outperform company expectation because our first large store has been opened for two years. It is not going to be a short-term action, where at the same time, we have multiple large stores at the same time. It is not just for one to two stores. From this perspective, we are not a short-lived bust driven by the opening hurdles. It is a sustained growth trend. Our store metrics keep evolving, and now we have a park format, flagship, regular, and pop-up.

[Ye Guofu, Founder and CEO at MINISO Group]

Let me just break down the larger store unit model with a few metrics. On our store performance, the park format family is very healthy. MINISO Land, our earliest format in this family, still deliver the store performance above CNY 3 million baseline, while the Super MINISO, newly launched in 2026, has already surprised us a lot, which can basically steady above CNY 1 million baseline. On the sales per square meter, the park format was running twice as that of the regular stores. The rent-to-sale ratio, the park format ran slightly higher than the regular store by a single-digit number. But the year worldwide trend was downward, thanks to the prime treatment after talking to the malls. On the paybacks, the park format store achieved a payback within six months in the early stage, and now average speaking, one year, faster than 60 to 80 months of the regular stores.

[Ye Guofu, Founder and CEO at MINISO Group]

Franchisee profit margin and share of the profit store has risen in tandem. In H1, the profitability of the MINISO store nationwide, which is best level since 2019. In H1, more than 30 Land format store entered into the same store base with average daily sales per store up to 30% growth YoY. Flagship format 400 stores, average daily sales per store grow mid-double digit YoY. We will stick to the quality over speed. The share of the large store and the flagship store will keep rising based upon our analysis. MINISO China total store number would reach 7,000 to 8,000. MINISO Land format family would be 1,200 with 95 in Super MINISO and MINISO FRIENDS. Flagship format reach 2,000, regular format 4,500. On site selection, location value, and traffic will always be our key criteria.

[Ye Guofu, Founder and CEO at MINISO Group]

We will take a look at the commercial district. Prioritize on top traffic versus a prime commercial area. For example, we look at the store structure, prioritize the corner position, the street-facing front. Thirdly, we take a look at the consumer circulation, making sure that a store is sit right on the main customer traffic corridor.

[Michelle Chen, Managing Director at Goldman Sachs]

Thank you. Thanks to Mr. Ye.

[Operator]

Thank you. Now let's welcome Yang Runbo from CICC.

[Yang Runbo, Analyst at CICC]

Hello, Eason and Mr. Ye, I'm Yang Runbo from CICC. I have a question. In H1 of this year, MINISO China performance was truly ideal. However, the domestic retail environment in China volatile in July to August. Some of the retail companies said that they are pressured. Can you share the consumption trends you were seeing in the market, and how the company is going to respond to that with concrete measures? Thank you.

[Ye Guofu, Founder and CEO at MINISO Group]

This is a very good question. According to the data from the National Bureau of Statistics, as many of you can see, you can see that in June it was declining, and in July it was only grow by 0.6%, which is not ideal at all. But for MINISO China, we remains strong. Since July, MINISO China GMV has grown about 20% YoY, driven by both rising shares of the larger store and also the Land format in our store mix and steady same-store development. You can see that in July, the same-store average daily sales has grown by mid-single digit. At this point, we see MINISO China will have a mid-double-digit revenue growth in H2. Those results are inseparable from our strategies we mentioned. Let me just share with you people, product, and stores.

[Ye Guofu, Founder and CEO at MINISO Group]

First of all, even if you see the social retail was going down, however, I see for traditional retail business, we still need the consumer to work. However, you see that for emotional sales, the sales was going up, for example, outdoor products, trendy toys, the sales was growing up, but traditional retail business was not growing that fast. That's the reason we have to continue to build our MINISO Land, because we are building immersive IP scene. That is the future trend. Let's also talk about people. Membership operation are key growth lever for us, especially build out the membership system. We shared some progress on membership program during the earnings call, including the growth in membership number, membership contribution to the sales. We need to have the refined operation of the store. Secondly, you need to talk about the product.

[Ye Guofu, Founder and CEO at MINISO Group]

Our product mix are now truly aligned with IP. For example, our proprietary IP, which can actually provide the most interest-driven product with many emotional value. Those product sales were growing very fast, especially in H1 of this year. Proprietary IP led by YOYO became a notable incremental driver with the designer toy category. Proprietary IP now already has a mid-single digit share of the offline sales and a double-digit share of the online sales, growing very fast, especially in top-tier stores such as MINISO Land and MINISO Stage. In the Genie collaboration, we have been deliberately pushing into higher price band to test more prime merchandise. We are also going to have the first Lisa-branded pop-up store, which will be available starting from the 1st of September. Many international celebrities and superstars are happy to embrace and work with MINISO.

[Ye Guofu, Founder and CEO at MINISO Group]

I hope they will be able to work with us to continue to work on the interest-driven consumption market in China. The economy was not good, but Chinese population is still huge. China has 1.4 billion people. Generation Z and people born after the 1980s and 1990s are still going to be a big proportion. Those people are never short of the material consumption. They need emotional value, and they need the interest consumption. Our competitors are also growing very fast, which showcases China has a huge potential to go further. In terms of the channel, I was talking about swapping the cage to bring in the better birds strategy, which will provide empty room for sustainable development of our domestic business in the upcoming years. Upholding the principle of quality over quantity, our domestic business is still in a fairly ideal state.

[Ye Guofu, Founder and CEO at MINISO Group]

We will keep advancing the renovation with existing store. I have already highlighted MINISO China 4,665 stores and a variety of the store formats. We are going to go for the lower-tier stores. You can see young people in China, they all need the interest-driven consumption with emotional value. If we are going to build good store scenarios, immersive experience, our trendy toy product and IP product are more attractive. That can actually help us to continue to improve the consumption and continue to draw the designer toy enthusiasm and move the price band further. I was coming back from northeast part of China. I see many of the stores being well positioned. I was mentioning about our store efficiency is no less than our competitors. Some of our stores can even outperform Pop Mart. That is our internal goal.

[Ye Guofu, Founder and CEO at MINISO Group]

If you have time, I would like to suggest you to take a look at our store at the Harbin Parkson store. We have two stores there facing each other. You can see that our performance outperforms Pop Mart at Harbin Parkson shopping mall, which actually boosts our great confidence for the larger stores. We internally proposed we need to improve the sales per square meter over the competitors. That is indeed the internal target we have. We have every confidence to make this target happen because you know that for our product and our trendy toy product in the land was more than 35, and we are going to make it more than 40. We already have two proprietary IPs now, including YOYO and CHOUCHOU. CHOUCHOU was just launched two days ago.

[Ye Guofu, Founder and CEO at MINISO Group]

If our proprietary CHOUCHOU proves to be successful, then we are going to have two proprietary IPs with annual sales of more than 1 billion. If we successfully hit this target, then I believe our diversified format plus proprietary IP is going to be a 50% performance from the trendy toys IP collaboration product for another half. In that way, our business model will be more stable, more sustainable, and more immersive and more experimental. Majority of our stores are having more than 800 square meters, including two floors. So I have every confidence in our large store format, especially the land format, even if we are facing challenges now. However, I truly believe we are still in the pain stage of the transformation. The profit has been under pressure. However, we have a promising future and I surely believe the business model we are running on still makes us feel excited.

[Ye Guofu, Founder and CEO at MINISO Group]

That is for domestic market. For international market, we are facing many problems. You know that starting from H2 of this year, I will spend more time working on the international market. In H1, we are working for the store format refinement in China. In H2 of this year, we are going to move to the rest of the international market. In Mexico, from the 10th to 15th of September, we are going to also have the MINISO Land format in Mexico. Problems that happened in China are also being faced in international markets. In Mexico, we are going to celebrate the anniversary. The Latin American consumer preferences are similar to that of China. Their income, population structure, and population density are very close to that of China. It is also the time for them to embrace the transformation and operating.

[Ye Guofu, Founder and CEO at MINISO Group]

You see the microeconomic picture, as far as I believe, interest-driven consumption, emotional value would be the next driver for the future growth. We probably do not need too much material value. Only in some African countries we are still in great need of the so-called material value. However, some developing countries like China and Asian countries, we will be shifting from the material value to the emotional value for interest-based consumption. Thank you.

[Operator]

Thank you. Coming next, let us welcome Anne from Jefferies. The line is open please.

[Anne Ling, Analyst at Jefferies]

Hello. Mr. Ye and Eason, and the IR team, I have a question that was about your latest performance. What are the latest same-store sales, SSS figure for July and August? Has weather been a factor? Could you split same-store sales into average selling price, ASP, and traffic?

[Anne Ling, Analyst at Jefferies]

How much have store upgrades, renovation, and product mix shifts contributed to the growth? Which product categories are performing best? Given the softer retail and last year's high base, what is your outlook for the same-store sales in H2 of 2026? Are there any difference between the higher-tier and the lower-tier cities? Thank you.

[Ye Guofu, Founder and CEO at MINISO Group]

In July and August, MINISO China seems to perform very steady, which is beyond our expectation, especially when we have the Super MINISO store. The performance was quite competitive. The store format, breaking down order value or volume contribution, 80%. Average transaction value grew by 20%. The volume and the price are rising, which is very healthy. We also mentioned we are going to have a higher consumer unit price and higher gross margin, which is not being started yet. We actually opened more high-end stores in The MixC, as well as the Taikoo shopping malls.

[Ye Guofu, Founder and CEO at MINISO Group]

The products are still in the refining stage, need to be further improved. I also would like to mention, same-store growth is driven by multiple engines, including the store upgrades and the product upgrades, along with the memberships. Where for the upgrades are not the sole source. Within a mid-single-digit same-store growth, store renovation contributed roughly low single digit. The rest are coming from the better refined operation, including the optimizing the product channel matching, making sure the right product in the right channel, and also tailoring the product mix to different store style or types. I have already mentioned to you, we have more high-end stores. But we are still going to improve our product. Product adjustment takes time, but that's not for the store adjustment.

[Ye Guofu, Founder and CEO at MINISO Group]

When we're talking about a store adjustment, we're still building the infrastructure, building it right, and then we're going to count on our product to continue to grow. We have our proprietary product, along with the accelerated development of the product mix. As you can see, no matter for large store model or designer toy, they are now in the tier one, the tier two cities. Penetration ratio in the lower tier cities are very low. This means lower tier cities offer broad room for expansion and are a potential source of the future same store growth. Let's talk about the category performance. Big toys is one of our best performing category with share of the total sell up to 1 percentage point on IP shares. IP products overall accounted for around one quarter of the sales. The share from the proprietary IP and artist IP rose by 4%.

[Eason Zhang Jingjing, CFO at MINISO Group]

Let me talk about H2 outlook. The high base vending coming from the Zootopia race in November and December last year, and we also have a decent IP lineup for the same period of this year. Overall speaking, with same store sell growing mid-single digit year to date, we remain confident in delivering full year low single digit same store growth in China, and the mid-double digit revenue growth in H2. We also see several important levers. First of all, keep optimizing low efficiency store. Second, on the product front, back to school season is a key focus. We did not do particularly right last year, and we will make sure we capture it this year. We are seizing opportunities for cultural creative categories, and we're going to work on that further. It's also going to be a good opportunity for us.

[Eason Zhang Jingjing, CFO at MINISO Group]

Thirdly, on holiday, we will capture the sell search window around National Day and the Mid-Autumn Day, firstly strengthening repurchase and the market share through the membership cashback credit mechanism.

[Anne Ling, Analyst at Jefferies]

Okay. Thank you, Mr. Ye.

[Operator]

Thank you. Next question. Let's welcome Shi Di from Huatai Securities, please.

[Shi Di, Analyst at Huatai Securities]

Thank you. Can you hear me? Yes. Okay. Good evening. Thanks for giving me the chance. My name is Shi Di from Huatai Securities. You know that, thanks for providing us a very clear guideline. In H1 of this year, the company have many new IP and many new product. For example, collaboration with Genie and generated a strong buzz in H1. Your proprietary IP, CHOUCHOU and YOYO, are also performing very well. What IP types and category expansion are planned going forward in H2? What are the levers for creating the blockbusters in H2? Any holiday season you have in your pipeline?

[Ye Guofu, Founder and CEO at MINISO Group]

Our IP strategy remains driven by two engines, licensed IP and proprietary IP. Each has its own plans. For the licensed IP, we have partnered with 180 global IP, spanning anime, film and TV, and celebrity IP, accumulating end-to-end experience from IP selection to product development to operation. You also talk about the Genie collaboration. Our product, for example, like accessories, blind box and plush, designing and producing 70 SKUs. You also see from the 1st of September, those product would be available. We also have more IPs in the pipelines. At the same time, we also have CHOUCHOU, which just started to release its great potential. At the same time, you can see for CHOUCHOU, the demand is far go beyond than the need, and which is actually the sold out.

[Ye Guofu, Founder and CEO at MINISO Group]

We never expect this going to be that popular from the very beginning, which is another way to look forward to that. It was very, very popular on the Red Book, which enjoy very good progress. On 12th of September, was going to officially launch collaboration with Lisa in Thailand. At the same time, 9th of September, we're going to have the Lisa collaboration IP exhibition. You all know how impactful Lisa might be. We're going to be the IP collaborator and IP exhibitor worldwide. We have already mentioned we're going to have the product, for example, the blinded box, as well as the cloth product or the patent. The price would also be quite friendly to the normal consumer. You can see the price would actually be further improved compared with what we have last year. The GP margin contribution is also reaching the best level.

[Ye Guofu, Founder and CEO at MINISO Group]

We are actually continue to improve that and continue to improve the product, the price, and be more experienced for the global layout. Regarding the proprietary IP, that is our long-term strategy lever. We're going to work with a large store format. As I have already mentioned, for YOYO, in June and July, its sales was more than CNY 100 million for two consecutive months, and was going to have a major IP collaboration later. That's going to go beyond the Disney collaboration. As you can see, YOYO also have the collaboration with McDonald's and also working with Luckin Coffee. All those advertisement could be identified on Xiaohongshu yesterday, and we also noticed that YOYO is indeed a very popular one, and all the consumer brands would like to work with us for that. So take a look at the Xiaohongshu.

[Ye Guofu, Founder and CEO at MINISO Group]

You will see how popular YOYO would be. You'll see that the success of CHOUCHOU proved again our proprietary IP model is truly successful and feasible. We're also going to have a good design. The team is getting more confidence. Success could be luck, but there are two success. It's not luck at all. You need the methodology and the set of the strategy to be mature. We're also working with different celebrities, especially our collaboration with Liu Yichun, which is very, very well established, which is also the global leading strategy. As you can feel that is already go beyond the doubt. We're learning, but we're also surpassing. That is a great strategy of my team. We're going to launch better and good marketing innovation in the near future, go beyond our peers, really surprise the industry, society, and the consumers.

[Ye Guofu, Founder and CEO at MINISO Group]

This can also help us to further clarify our commercial proprietary IP are actually going from stage to stage to a more mature phase. To summarize my answer to your question, I think we have a few levers. We continue to work with the top licensed IP, celebrity IP, insist on incubating our proprietary IP with our existing IP metrics. We are going to have the IP and the product working together. We are going to work with different categories and SKUs, leveraging our large store and different format to continue to convert the IP sales and continue to advance our proprietary IP. You can even come to our store to take a look at that. You can see that for Disney and YOYO, we are now having the blind box been working together.

[Ye Guofu, Founder and CEO at MINISO Group]

You can also see that for CHOUCHOU, the blind box was also being well created, very much professional. As far as I believe, our blind box is making huge progress regarding the collaborations, which is no inferior than our peers. This is also something we are progressing very fast. As long as we have a good use case, good IP, if the consumers come to our store, they believe we are professional, especially after working with Liu Yichun, and we surely believe the MINISO trendy toy consumer measure is continue to progress. That could also help to build future collaboration. While at the same time, it is going to be a great driver for our future growth. That is all for me. Thank you.

[Operator]

Thank you, Mr. Ye. Hope we will hear more IP from you. Next question, Samuel from UBS, please.

[Samuel Wang, Analyst at UBS]

Thank you. Thanks for Mr. Ye and Eason for the question. I have a question regarding the U.S. market. As being shown and talked, you have already proposed a target for $4 billion for revenue and $400 million for profit. But in Q2, we see the sales being somewhat slowed down, and how you are going to complete this target. Are there any driver you have? But at the same time, regarding the profit, how you are going to improve the profit?

[Ye Guofu, Founder and CEO at MINISO Group]

Well, thank you very much. Internally speaking, we actually make U.S. and Canada as a whole. I have already mentioned, and for North America, our performance target was $4 billion, and we hope that it is going to be 10% of our net profit margin. Excluding the short-term data, if you take a look at the U.S. only, MINISO was the fastest-growing retail in U.S. in 2025.

[Ye Guofu, Founder and CEO at MINISO Group]

It was being covered by Forbes. However, it is not only just for that. When we converted our sales from direct to the indirect, U.S. business posted a CAGR of 120 from 2022 to 2025, where for same-store performance, we are going to maintain a full-year target of low single-digit growth, which is in line with our expectation. Improving U.S. margin still going to count on the operating leverage, even optimizing the store numbers. For the past two years, we actually opened some stores with large foot traffic, where at the same time, as you have already mentioned, we are going to slow down. Slow down a little bit. Also continue to work together and improving the profit and revenue as a whole.

[Operator]

Next question coming from CITIC.

[Analyst at CITIC]

Thank you. Thanks for the question to raise this question. Hello, I have a question.

[Analyst at CITIC]

In H1 of this year, you have already mentioned that you open stores in peak season and operating your business. I was talking to you for Eason and for Mr. Ye, you are quite confident.

[Analyst at CITIC]

[Non-English content]

[Analyst at CITIC]

What will be your expenses planning and look into H2 of this year, whether the interest are going to be accelerated. Thank you.

[Eason Zhang Jingjing, CFO at MINISO Group]

[Non-English content]

[Eason Zhang Jingjing, CFO at MINISO Group]

I was recording a few numbers. You can see that in H1 of this year in North America, the store net addition was 75. In other words, we really want to make sure the stores being opened before the peak season, making sure that we accelerate the growth of the North America store, where for the full year, sales and profit, which is very typical to the retailer in North America.

[Eason Zhang Jingjing, CFO at MINISO Group]

We are not making money in H1 of this year, all the time we count on H2 or even Q4 to help to drive the overall sales. In my prepared remarks, I have already shown you a slide that is a 5BU profit rate. You can also see that for 2025, you could take a look at the last year. As you can see that the number was around 30% for franchise and agents business, which already in line with what I have already mentioned, the sales peak season for the seasonality. Look into H2 of this year. As you can see that our profit will continue to steadily increase. International agency remains stable. However, we would like to split the direct sales into two parts, including the North America direct sales, which was 10%, where at the same time, we also have the direct sales business that are still in the growth stage, for example, Europe, Australia, and Asia market. We are going to continue to optimize North America back office expenses. In H1 of this year, the back-end expenses ratio in U.S. decreased slightly. Profit margin will continue to grow, where at the same time

[Eason Zhang Jingjing, CFO at MINISO Group]

[Non-English content]

[Eason Zhang Jingjing, CFO at MINISO Group]

You can see.

[Eason Zhang Jingjing, CFO at MINISO Group]

[Non-English content]

[Analyst at CITIC]

[Non-English content]

[Eason Zhang Jingjing, CFO at MINISO Group]

Okay, well taken. You see hope that in 2027, we are going to have a good performance and improvement on net profit. Thank you.

[Operator]

Thank you, Eason. Next question coming from[inaudible], from Changjiang Securities.

[Analyst at Changjiang Securities]

Thanks for the team. Thanks for the opportunity of raising the question. My name is[inaudible]from Changjiang Securities. I have a question regarding your U.S. business. Some investors has already asked the question, I would like to ask you for U.S. merchandise strategy. You know that as well, adjusting our product metrics. I would like to ask for the management team, what would be our key focus next year in the United States in H2 of this year? How you are going to comment on the balance between the domestic direct and the indirect sales?

[Ye Guofu, Founder and CEO at MINISO Group]

For U.S., refining the product mix is something we do continuously, particularly amid micro policy change. We have constantly adjusting our overseas profit product mix. In terms of the sales contribution, the stationery remain our largest category in U.S., contributing over one third of the sales, especially in wheel plush performing especially well. You can see that majority of that in the U.S. are built on the licensed IP. We plan to launch a proprietary IP next, which should contribute incremental growth going forward. At the same time, in Q2, some best-selling IP product were out of stock due to merchandise planning. We bridged the sales gap through rapid direct sourcing. As a result, due to the product planning, some of these product are out of the stock. That is not going to be our key. We are going to continue to differentiate the product where you can see that in U.S., the sales was declining from 60% to 70% in early 2024 to close to 40% in H1, while the share of the directed sourced product rose considerably.

[Ye Guofu, Founder and CEO at MINISO Group]

Among those directed sourced stacks have significantly improved the conversion and attachment rates in store. Where U.S. is actually under pressure, we are still adjusting our product metrics. Even we slow down the store openings in the United States. For U.S., our headquarter is now actually making huge investment on the merchandise center. Regarding the GP margin, the U.S. market GP margin was around 65%-70%, part due to the tariff rebates, which will also give us some positive contribution in H2 of this year. At the same time, the asset ratio is well under control with the launch of the blockbuster IP and increase in the proportion of the IP. We believe the GP margin U.S. would increase in H2 of this year. Thank you.

[Operator]

Thank you, Mr. Ye. The next question, Wuchang Xi from[inaudible], please.

[Analyst]

Okay. Thank you. My name is Wuchang Xi. Thanks for giving me the chance to raise a question. As you have already mentioned about the distributor operation are still facing some resilience. I would like to ask you, what is the company's outlook and plan for the distributor market growth? Thank you.

[Eason Zhang Jingjing, CFO at MINISO Group]

Okay. Thank you. I am Eason. In H1 of this year, distributor slowed. They are restocking. However, it is being slowed down, so the revenue was growing. Looking to H2 of this year, you see that the distributor revenue was still going to dump by 10%. I think the negative growth in revenue won't necessarily mean the end demand was problematic. What is the situation of the distributor market? For the full year of 2025, overall sales of the distributor business was more than CNY 10 billion.

[Eason Zhang Jingjing, CFO at MINISO Group]

The taka was more than 10%, which was always robust. Excluding the forex reason, you can also see that the GMV still maintain a high single digit in H1. We see the gap, which can see some of the channel are still digesting the inventory. In that way, the distributor restocking lags behind their own sales growth, a normal phenomenon in inventory digestion process. Secondly, behind the negative growth, there were also external factors and our own issues. Externally, some markets in Middle East and Asia were affected by geopolitical conflict, currencies warnings, and other micro factors. The inventory turnover in those market came under pressure in H1. North American market also faced micro currency and natural disaster headwinds, but its inventory turnover improved in H1. We operated in 80 distributor market overseas, with top 80 accounted for 80% of the overall business.

[Eason Zhang Jingjing, CFO at MINISO Group]

In H1, inventory turnover in the top 80 market was roughly flat versus last year, and somewhat better than the directly operated market overall speaking. Internally, as we have already candidly acknowledged, you can see that internally, we have the candid knowledge of previous communication, and we just want to maintain long-term health of the channel rather than pushing inventory into short-term result. Terminal sales were being normalized today. At the same time, we also further reduced the store number. For example, in New Zealand, in Philippines. Where at the same time in the mid of this year, and also due to the healthy channel issue, we actually made the strategic investment closing down some of the low-efficiency stores. We look forward for international market, and we are going to have another 100 to 110 in H2 net closure, where this decision makes short-term pressure on distributor revenue.

[Eason Zhang Jingjing, CFO at MINISO Group]

However, in the long run, it can also help to ensure healthy and sustainable development of the entire business ecosystem. As you can see that North American market is our key place. The local distributor are actually having very strong background and operation capacity, and the retail location of those market are actually seeing a low single digit in H1. Terminal performance was steady. In North America, likewise, we will not trade short-term revenue for channel health. You can see that Mexico market in Q3 and Q4 is going to celebrate the 10th anniversary. The market will also continue to roll out the improved format, and we are going to have a MINISO Land and a Super MINISO in those key malls in key cities. In terms of the product and operation, for distributor regions with established scale, we will deploy localized product.

[Eason Zhang Jingjing, CFO at MINISO Group]

On IP product, we fully recognize the launch cadence needs stronger planning. We have now built a more complete launch calendar that clearly marks the key local holidays and the launch timing for different stage IP. Through this way, we will be able to maximize the incentivize the sales momentum. For category with growth potential, we will help distributor markets iterate their marketing plans, offering better plans, iteration, and empowerment in scenario-based content, closing the content gap, lifting the sell-through of the high momentum categories. For the overall product mix, we will phase out low efficiency, low margin SKUs. Adding value for value for money everyday product to make up the volume, and also bringing high value for money local bestseller to drive the sales.

[Analyst]

Okay. Thank you, Eason. Very clearly explained.

[Operator]

Thank you, Eason. Thanks for all the investors being interested in MINISO. See you next time.

[Operator]

Here comes to the end of today's call

Participants

Executives

• Ye Guofu, Founder and CEO
• Eason Zhang Jingjing, CFO

Analysts

• Michelle Chen, Managing Director at Goldman Sachs
• Yang Runbo, Analyst at CICC
• Anne Ling, Analyst at Jefferies
• Shi Di, Analyst at Huatai Securities
• Samuel Wang, Analyst at UBS
• Analyst at CITIC
• Analyst at Changjiang Securities
• Analyst