MINISO Gains On Q2 Beat, Gross Margin Expansion Boosted By Brand Upgrade

MINISO Group Holding Limited MNSO reported a second-quarter FY23 sales decline of 10% year-on-year to $361.66 million, marginally above the consensus of $361.33 million.
Gross profit increased 15.6% Y/Y to RMB997.1 million ($144.6 million). The gross margin was 40% versus 31.1% last year.
Operating income for the quarter was RMB447.6 million ($64.9 million), representing an increase of 75.2% year over year.
The number of MINISO stores increased by 395 in the quarter to 5,440 as of Dec. 31, 2022.
It reported Adjusted earnings per ADS of $0.17, which beat the consensus of $0.13.
The company noted that the December quarter witnessed the most serious challenge to China operations caused by the pandemic since its outbreak in 2020, with sales in offline MINISO stores decreased by 28% compared to the same period of 2021.
The company held $893.2 million in cash and equivalents as of Dec. 31, 2022.
Price Action: MNSO shares are trading higher by 4.24% at $17.70 in premarket on Tuesday.

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