Miniso Group Holding Ltd. (HKG: 9896) is being sold off by investors this morning, after it announced that its profits were down in the first-quarter despite a solid growth of revenue.
The company shares are down by nearly 20% from their previous closing price.
The sell-off could be an opportunity for investors to take advantage of Miniso’s strong fundamentals and strategic growth.
Miniso’s stock has fallen 35% from its high for the year.
Miniso has a global expansion strategy that is dedicated to Miniso’s success
Miniso attributes much of the weakness in its first-quarter bottom line to an increase of more than 46 percent in costs related to selling and distribution, which was mainly attributed to Miniso’s efforts to expand globally.
Miniso has a long-term strategy of growth, and while higher costs may impact earnings in the short-term, this investment is aligned with that.
Many companies sacrifice their short-term profit to gain market dominance.
Miniso’s international expansion will likely lead to increased revenue in the future, as markets develop.
Miniso’s shares could be worth purchasing on the dip following earnings, as its sales increased by nearly 19% in the first quarter of the year, indicating a strong consumer demand despite the macro-uncertainty.
Investors can also be reassured by the optimism expressed by Miniso’s chief executive Ye Goufu about the long-term viability of the company.
Miniso’s global reach and adaptability were highlighted in his earnings announcement, underlining the management’s confidence in Miniso’s brand resilience amid the economic uncertainty.
Miniso Stock is focused on shareholder return
Miniso’s stock may have been sold off today after the Q1 results, but it could be an opportunity to buy because this discount retailer also recorded their highest gross margin ever for a quarter in March.
The company has shown that it can maintain healthy profit margins in difficult conditions.
Miniso’s franchise business on the mainland remained steady, showing operational resilience.
Miniso, a stock that is rewarding for both income seekers and stock buyers alike, has a dividend yield of 3.38 % as well as an active repurchase program.
Miniso’s shares are more appealing to buy in the second half of 2025 because these initiatives show management is focused on shareholder value.
Wall Street continues to be bullish about Miniso shares
Miniso’s Q1 fiscal quarter may have been a disaster, but the recent quarter wasn’t.
In its Monday release, management also committed to balancing growth with cost-control discipline for more predictable future earnings.
Miniso has proven to be a profitable company.
Miniso’s stock has an earnings-to-price ratio of 15 which makes it a bargain compared with the entire discount retail sector. Wall Street rates Miniso stock as “buy” at the moment.
The post, Top Reasons to Buy Miniso Stock on the Post-Earnings Decline may change as new information becomes available.
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