Shares of Pop Mart, the maker of Labubu, fell over 4% in Hong Kong on Friday following the release of its first-half results, which revealed declining sales in the Asia-Pacific region (excluding China) and the Americas [1]. For the period ended June 30, Pop Mart reported a 23.8% year-over-year increase in first-half revenue to 17.17 billion yuan ($2.55 billion) [1]. However, the growth was uneven: revenue in Asia Pacific excluding China fell 9.7%, and revenue in the Americas dropped 16.5%, while revenue in China surged 47.3% [1].
Citi noted that the results were below expectations, highlighting an 11% year-over-year decline in overseas market sales [1]. The company has faced global challenges, including inventory management, supply chains, warehousing and logistics, and store operations, according to Citi [1]. In response to these headwinds, Citi now expects Pop Mart's group revenue to decline 8% year-over-year in 2026 and has lowered its price target to HK$198 [1].
Management at Pop Mart has acknowledged that achieving its initial 20% revenue growth target for 2026 will be difficult due to more challenges than anticipated and increased competitive pressure [1]. Following the results, Pop Mart shares were recently down 3.9% to HK$147.70 ($18.84) [1].
CONCLUSION
Pop Mart's uneven revenue growth and significant overseas sales declines have led to a sharp drop in its share price and a reduced outlook from Citi. The company faces mounting challenges in global markets, making its previous growth targets increasingly difficult to achieve.