Pop Mart, the Chinese toymaker known for its collectible figurines like Labubu, announced that it is likely to miss its full-year 2026 sales growth target of 20%. This comes after a slowdown in its first-half performance, where revenue grew 24% to 17.17 billion yuan ($2.5 billion), a significant deceleration from the more than 200% surge in the prior year. Net profit also fell short of consensus views, rising 10.14% to 5.04 billion yuan.
The weaker-than-expected results were attributed by CEO Wang Ning to tepid consumer demand, geopolitical tensions, and the high base from the previous year's outstanding performance. International sales were particularly impacted, dropping 11% year-on-year, which also affected the company's gross profit margin as international sales typically offer higher margins. The company aims to expand its store count in the U.S. from over 80 to more than 100 by year-end, in addition to its over 400 stores in mainland China.
The decline in growth is linked to the cooling demand for its once-viral Labubu character, which saw a significant boost from celebrity endorsements last year. The Labubu Monsters collection, while still the largest revenue contributor, saw its share of overall sales drop from approximately one-third to about a quarter. Analysts like Sammi Xu from Deutsche Bank noted that demand for the latest Labubu iterations was much tamer. Pop Mart is now betting on a new character, Twinkle Twinkle, which was its fastest-growing IP in the first half, contributing around 15% of group revenue with sales surging over fivefold. The company also announced a share buyback plan ranging from 2 billion yuan to 5 billion yuan ($740 million) as a show of confidence in its outlook, despite the current operational challenges.
While some analysts, like Jeff Zhang from Morningstar, believe Pop Mart has strong potential to become an IP powerhouse akin to Disney or Sanrio, others are split on the durability of its business model. The company's shares slumped as much as 8.9% following the announcement, though they pared losses to 4.2%. They are down nearly 20% this year, following a period of explosive growth in 2024 and 2025 where they doubled and more than quadrupled in value, respectively. CEO Wang Ning stated that the company is prioritizing long-term development and corporate governance over immediate sales growth, viewing 2026 as a year of operational readjustment.
