(Oct 21): Chinese toymaker Pop Mart International Group Ltd posted strong revenue growth in mainland China and overseas markets during the quarter featuring the release of a new series of its popular Labubu dolls.
Revenue increased as much as 250% year-on-year in the three months ended September, with sales in overseas markets surging as much as 370% compared with around 190% growth in mainland China, Pop Mart said in a Hong Kong stock exchange business update.
Pop Mart’s sales took off in the second half of last year, driven by releases of its plush Labubu toy, which became a global hit adored by celebrities and average consumers alike. The company launched new mini Labubu dolls in late August, fuelling another wave of buying frenzy for the monster toy.
Western markets continued to generate faster sales growth for Pop Mart. Revenue in America gained as much as 1,270% in the third quarter. Europe sales grew as high as 740%. In Asia Pacific, sales increased between 170% and 175%.
The global collecting mania for Labubu dolls has made it difficult for Pop Mart to accurately predict earnings growth. The company had hoped earlier this year to hit 20 billion yuan (RM11.88 billion) in full-year revenue. By August, CEO Wang Ning said on an earnings call that even 30 billion yuan would be quite easy to achieve.
Pop Mart’s shares closed down 8.1% Tuesday (Oct 21) ahead of the business update, the worst single-day drop since April.
“Investors may be worried about sales growth slowing from last year’s high base,” said Steven Leung, executive director at UOB Kay Hian Hong Kong Ltd. Concerns that the Labubu doll craze might be cooling off have halted Pop Mart stock’s stunning rally since hitting a peak in late August.