MINISO Group (MNSO) Q2 2023 Earnings Call Transcript

For the period ending December 31, 2022

February 28, 2023 4:00 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Ladies and gentlemen, thank you for standing by, and welcome to MINISO’s Earning Conference Call for the Second Quarter of Fiscal Year 2023 that ended December 31, 2022. [Operator Instructions] Please note that this event is being recorded. We have announced our quarterly financial results earlier today and earnings release is now available on our investors relationship website at ir.miniso.com.

Joining us today are our Founder and CEO, Mr. Jack Ye; and our CFO, Mr. Eason Zhang. Before we continue, I would like you to refer to the safe harbor statement in our earnings press release, which also applies to this call, as we will be making forward-looking statements. Please also note that we will discuss non-IFRS financial measures today, which we have explained and reconciled to the most comparable measures reported under the International Financial Reporting Standards in the company’s earning release and filings with the U.S. SEC and Hong Kong Stock Exchange. In addition, we have prepared a PowerPoint presentation for today’s call which contains financial and operational information for this quarter.

If you are using Zoom meeting, you should be seeing it right now. You can also revisit it on our IR website later. Now I’d like to hand the conference over to Mr. Ye, and Mr. Zhang will translate for Mr. Ye. Please go ahead, sir.

Jack Ye

[Foreign Language]

Eason Zhang

Hello, everyone, and welcome to MINISO Group’s December Quarter 2022 Earnings Conference Call. Continuing our strong performance from the September quarter, we delivered another strong profitability result in the December quarter to cap off a successful ‘22 calendar year. We achieved these results in the most severe pandemic-related challenges of the past 3 years. In the December quarter, the company’s gross margin increased by 8.9 percentage point from same period last year, reaching a record high of 40%. Overseas revenue increased by nearly 40% year-over-year, effectively offsetting the adverse impact of the domestic pandemic situation.

Adjusted net profit increased by 82% year-over-year. Adjusted net margin remained stable compared to the prior quarter at 15%. And excluding the impact of foreign exchange gains, net margin for the December quarter was 14.9%, up from 13.2% in the December quarter.

Jack Ye

[Foreign Language]

Eason Zhang

Let me walk you through our performance of the quarter by segment. Starting with MINISO China. According to our estimates, total foot traffic to offline MINISO stores decreased by 32% year-over-year in this quarter, while average ticket size increased by 6%, thanks to our brand upgrade efforts, partially offsetting the decrease in traffic. As a result, we saw a 28% decrease in revenue from MINISO’s offline operation in China.