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On Tuesday, Deutsche Bank (ETR:DBKGn) analysts downgraded Miniso shares listed on the New York Stock Exchange (NYSE:MNSO) from a ’Buy’ to a ’Hold’ status, adjusting the price target to $20.00. The stock, currently trading at $18.29, has declined over 12% in the past week. The revision comes after Miniso reported its first-quarter financial results for the year 2025. According to InvestingPro analysis, the company maintains a "Great" financial health score.
The company’s revenue for the first quarter exceeded its own forecasts, yet its earnings fell short by 10%. Despite this, Miniso has demonstrated strong performance with 21% revenue growth over the last twelve months and maintains healthy profit margins of 45%. This discrepancy prompted the reassessment by Deutsche Bank. In their evaluation of the company’s performance, Deutsche Bank noted Miniso’s ongoing efforts to optimize its network. This strategic move led to the closure of 111 Miniso brand stores in China on a quarter-over-quarter basis.
By the end of the first quarter of 2025, Miniso maintained a global presence with approximately 7,500 operational stores. Within China, the brand operates 4,275 stores, while internationally, the number stands at 3,213. Despite the net closures in China, Miniso experienced a net increase of 95 stores globally during the quarter, including the addition of 25 new locations in North America.
The adjustment in Miniso’s stock rating reflects Deutsche Bank’s analysis of the company’s recent earnings report and store optimization strategy. The new price target of $20.00 is set against this backdrop of store closures in China and expansion in overseas markets.
In other recent news, MINISO Group Holding Limited reported mixed results for its first quarter. The company’s earnings per ADS fell short of analyst expectations, coming in at RMB1.88 ($0.26), while analysts had projected RMB2.14. However, revenue for the quarter slightly exceeded forecasts, growing 18.9% year-over-year to RMB4.43 billion ($610.1 million), compared to the anticipated RMB4.41 billion. Despite the revenue growth, MINISO’s adjusted net profit declined to RMB587.2 million ($80.9 million) from RMB616.9 million the previous year, with the adjusted net margin decreasing to 13.3% from 16.6%.
The company noted that increased investments in directly operated overseas stores impacted profitability. As of March 31, MINISO operated 608 stores directly in overseas markets, nearly doubling from 327 stores a year earlier. The company’s gross margin improved slightly to 44.2%, up 0.8 percentage points from the same period last year. MINISO ended the quarter with a total of 7,768 stores globally, marking a net increase of 978 stores year-over-year. Additionally, the company maintained a robust cash position of RMB7.26 billion ($999.8 million) as of the end of the quarter.
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