Pop Mart International Group shares fell the most in nearly five months after the Labubu toymaker said it will likely miss its 2026 sales-growth target, citing a far tougher-than-expected first half.
The Hong Kong-listed stock fell as much as 8.9 per cent in early trading on Aug 21, the biggest intraday drop since March 26. Company executives’ comments on outlook came on Aug 20 after the firm reported weaker-than-expected revenue and net income for the period ended June.
Soft sales and continued weakness in overseas markets point to a more difficult stretch ahead for Pop Mart, according to Jefferies analysts led by Anne Ling.
Challenges are mounting for Beijing-based Pop Mart, with sales of its blockbuster Labubu toys normalising after an explosive surge in 2025. The company is still struggling to build a lasting entertainment franchise beyond its one hit product.
Although the company did not provide a detailed breakdown of second-quarter sales, most analysts estimate second-quarter revenue contracted by around 10 per cent, sounding caution heading into the September quarter, which faces a difficult base of comparison given the 2025 Labubu-driven sales surge.
Morgan Stanley cut second-half sales estimate, expecting it to decline 35 per cent to 40 per cent in the third quarter and drop about 10 per cent in the fourth quarter. Citigroup now forecasts group revenue to decline 8 per cent in 2026, with analysts including Lydia Lin saying visibility on recovery remains low.
“We will most likely fail to hit the 20 per cent growth target,” chief executive Wang Ning said at a briefing on Aug 20. “Overseas performance saw a year on year decline in the first half of this year,” he said.
The company has seen a large inventory build-up for the past six months and more, chief operating officer Si De said at the same briefing.
Despite the slowdown, Pop Mart said it will continue rolling out new Labubu products to support its flagship franchise. The company also announced plans for a 2 billion yuan (S$377.9 million) to 5 billion yuan share buyback within the next six months, signalling confidence in its long-term outlook even as growth faces challenges in the near term. BLOOMBERG
