Deutsche Bank: Miniso (MNSO.US) 1Q26 Review — Strong Revenue, Margins Under Pressure
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Deutsche Bank reviewed Miniso's first-quarter fiscal 2026 results, highlighting strong revenue growth overshadowed by persistent margin headwinds. Revenue surged 25% year-over-year, exceeding the bank's estimate by 5%. International operations delivered 40% revenue growth, lifting their share of total revenue to 35%, while IP collaboration products contributed 20% of domestic revenue, underscoring a key differentiator in a competitive landscape.
However, gross margin contracted 1.2 percentage points to 38.5% due to product mix shifts toward lower-margin categories and increased promotional activity. Operating margin fell 0.8 percentage points to 15.2%, reflecting higher selling and administrative expense ratios. Domestic same-store sales grew only 3%, trailing the industry average and signaling intensifying competition.
Deutsche Bank lowered its fiscal 2026 to 2028 EPS forecasts by 3% to 5% to reflect structural margin pressure. The price target was reduced from $30 to $28, based on 18 times fiscal 2027 P/E. The Buy rating was maintained, though the bank acknowledges limited near-term upside potential. Management guided to 20% to 25% revenue growth for fiscal 2026 but did not provide a specific margin target. Margin recovery remains the critical variable for share price appreciation, with downside risks including rising raw material costs, domestic competition, and potential international expansion shortfalls.
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