Pop Mart Shares Slide Further After Third-Quarter Revenue Nearly Halves

Shares of Chinese toymaker Pop Mart, the company behind the hugely popular Labubu dolls, extended their decline on Wednesday after the firm disclosed a sharp fall in third-quarter revenue. The stock is now down more than 30% so far this year.

Trading was volatile during the session. Shares fell more than 6% in early trade before recovering some ground, and were last down by less than 2%. The stock has finished lower in nine of its last 12 sessions.

In a filing released on Tuesday, Pop Mart said third-quarter revenue dropped between 45% and 50% from the same period a year earlier. The scale of the fall has prompted fresh doubts about whether the craze for Labubu and other collectible toys can keep driving the company's rapid growth, especially outside China.

The pain was most acute abroad. Revenue in the Americas shrank by 70% to 75%, while Asia-Pacific sales fell 65% to 70%. Europe and other regions posted declines of 50% to 55%. In mainland China, revenue fell by a smaller but still significant 25% to 30%.

According to Jefferies, the results were weaker than the 30% revenue decline analysts had forecast, though they were broadly in line with the expectations of buy-side investors. The brokerage lowered its earnings estimates for Pop Mart for 2027 and 2028 by 9% to 12%, pointing to pressure on profitability from softer overseas sales.

Jefferies also expects a modest improvement in the final three months of the year. It projects fourth-quarter revenue will rise 3% from the previous quarter, but will still sit 34% below the level of a year earlier.

Despite the slowdown, Pop Mart is pressing ahead with its global retail expansion, according to Jefferies. The company is putting more emphasis on flagship stores in cities such as New York, Milan and Paris. It is also working to broaden its lineup of intellectual properties beyond Labubu, with SKULLPANDA, Hirono and Twinkle Twinkle gaining traction in overseas markets.