Pop Mart Shares Fall as Overseas Sales Weakness Clouds Growth Outlook

Pop Mart reported solid headline growth in the first half of the year, with revenue increasing 23.8% from a year earlier to 17.17 billion yuan. However, the results revealed a widening gap between its strong domestic business and weakening performance overseas.

Revenue in China jumped 47.3% year over year, providing the main engine of growth. In contrast, sales in Asia-Pacific excluding China declined 9.7%, while revenue from the Americas dropped 16.5%.

The international weakness is particularly significant for Pop Mart because overseas expansion has been an important part of the company’s longer-term growth story. Citi estimated that overall overseas sales declined around 11% year over year, falling short of expectations.

According to Citi, Pop Mart has encountered several operational challenges outside China, including inventory management, supply-chain constraints, warehousing and logistics, as well as store operations. Growing competitive pressure is adding another obstacle as the company seeks to translate the popularity of characters such as Labubu into sustainable international growth.

The weaker performance has prompted management to acknowledge that its original target of 20% revenue growth in 2026 will be difficult to achieve. Citi now forecasts group revenue will decline 8% year over year this year and lowered its price target for Pop Mart to HK$198.

Investors reacted negatively to the update, sending Pop Mart shares down more than 4% during Friday trading. The stock was recently trading around HK$147.70, reflecting concerns that slowing international momentum could outweigh continued strength in the Chinese market.

The results put greater focus on whether Pop Mart can resolve its overseas operational challenges and restore growth outside China. While its domestic business remains strong, sustaining the company’s broader valuation and long-term expansion story will increasingly depend on proving that the global popularity of its intellectual properties can translate into consistent international sales.