Labubu maker Pop Mart drops after warning 2026 growth target out of reach
The Hong Kong-listed stock fell as much as 8.9 per cent in early trading on Aug 21.
Shares of Labubu toymaker Pop Mart International Group dropped the most in nearly five months following the company's warning that it likely would miss its 2026 sales growth target. The Hong Kong-listed shares fell as much as 8.9% in early trading on Aug 21, its biggest intraday decline since March 26. Executives' comments on the outlook followed the firm reporting weaker revenue and net income for the period ending June after a surge in Labubu toy sales in 2025.
Analysts from Jefferies, led by Anne Ling, cited softer sales and continued struggles in overseas markets as pointing to a more challenging period ahead for the Beijing-based company. Pop Mart has yet to establish a lasting entertainment franchise beyond its one-hit product, with second-quarter revenue estimated to have contracted around 10%, according to most analysts.
Morgan Stanley and Citigroup have both revised downward their revenue forecasts for the company in 2026, with Morgan Stanley expecting a decline of 35% to 40% in the third quarter and Citigroup forecasting a 8% drop for the year. CEO Wang Ning told a briefing on Aug 20 that the company "will most likely fail to hit the 20% growth target," citing a decline in overseas performance during the first half of the year.
The company has faced a large inventory buildup over the past six months and continues to roll out new Labubu products to support its flagship franchise, while announcing plans for a share buyback of 2-5 billion yuan.
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