Labubu maker Pop Mart shares fall as it warns 2026 growth target likely to be missed
Firm still struggling to build a lasting entertainment franchise beyond its one hit product
Pop Mart International Group shares plunged to their lowest level in nearly five months on Friday after the Labubu toy maker warned it is likely to miss its 2026 sales growth target. The Hong Kong-listed firm's stock dropped as much as 8.9% in early trading, marking the biggest single-day decline since March. The warning came after the company reported weaker-than-expected revenue and net income for the first half, with softer sales and ongoing struggles in international markets.
Jefferies analysts, led by Anne Ling, suggested that challenges are mounting for Beijing-based Pop Mart, as sales of its hit Labubu toys are normalising after an explosive surge in 2025. The company has not provided a detailed breakdown of its second-quarter sales, but analysts estimate revenue contracted by around 10%, raising concerns for the upcoming September quarter.
Morgan Stanley has lowered its second-half sales estimate, expecting a decline of 35-40% in the third quarter and about 10% in the fourth quarter. Citigroup forecasts a 8% drop in group revenue for 2026, with analysts expressing low visibility on a recovery. Pop Mart's CEO Wang Ning admitted during a briefing that the firm "will most likely fail to hit the 20% growth target" and noted a year-on-year decline in overseas performance during the first half.
The company is grappling with a large inventory build-up from the past six months and faces further challenges ahead, despite plans to roll out new Labubu products and a share buyback worth 2-5 billion yuan within the next six months.
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