Bubble tea seller Mixue Group (2097.HK) said on Thursday its revenue grew slightly in the first half of the year as it aggressively expanded its global store network, but its profit fell as it ramped up its administrative, marketing and distribution spending.
The company reported revenue of 15.2 billion yuan ($2.26 billion) for the six months to June, up 2.3% from 14.9 billion yuan in the same period a year earlier. It had 63,951 franchised stores in 17 countries in its network at the end of June, up about 20% from 52,996 a year earlier.
The company’s sales and distribution expenses rose 22.9% year-on-year to 1.12 billion yuan in the latest six-month period, while its administrative expenses rose 39.4% to 610 million. Its cost of sales also rose 4.1% during the period, outpacing its revenue growth, with the result that its gross margin fell 1.2 percentage points to 30.4% from 31.6% a year earlier.
As a result of those factors, the company’s profit fell 14.5% in the first half of the year to 2.3 billion yuan from 2.69 billion yuan a year earlier.
Mixue’s stock fell 8.4% to close at HK$227.80 on Thursday after the results were published. The stock is down about 45% this year.
By Doug Young
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