Pop Mart’s Next Act Gets Harder as Labubu Growth Cools
Pop Mart's 2026 interim results show a business that is still expanding, but at a much slower pace than investors had become accustomed to. Revenue rose 23.8% year-on-year to RMB 17.17 billion, while adjusted net profit increased 9.5% to RMB 5.16 billion.
Intelligence analysis by Llama
Pop Mart's growth slows as overseas sales reverse, with revenue from its China operations increasing 100-105% in the first quarter. The company is relying on new IPs, tighter operations, and shareholder returns to drive growth.
Imagine you have a toy store that sells really cool collectibles. But now, people are buying fewer of those collectibles and more plush toys. The store needs to adapt and sell more plush toys to stay in business.
Analysis
The Cooling of Labubu and the Rise of Twinkle Twinkle
Pop Mart's 2026 interim results show a business that is still expanding, but at a much slower pace than investors had become accustomed to. Revenue rose 23.8% year-on-year to RMB 17.17 billion, while adjusted net profit increased 9.5% to RMB 5.16 billion. The market response was negative, with Pop Mart shares closing at HKD 149 (USD 19) on August 21, down 3.1% from the previous session.
The deceleration became more visible as the year progressed. Pop Mart said first-quarter revenue rose 75-80% year-on-year, while revenue from its China operations increased 100-105%. With first-half growth at 23.8%, the figures point to a sharp slowdown in the second quarter, although the company has not disclosed a second-quarter growth rate.
The clearest reversal came overseas. In 2025, overseas operations generated RMB 16.27 billion (USD 2.4 billion) in revenue, up 291.9% from a year earlier, and increased their contribution to group revenue to 43.8% from 31.8%. Revenue in the Americas alone rose 748.4%. In the first half of 2026, overseas revenue fell 11.1% year-on-year to RMB 4.97 billion (USD 738.6 million), accounting for about 29% of group revenue.
Asia Pacific revenue declined 9.7% to RMB 2.58 billion (USD 383.4 million), while revenue in the Americas fell 16.5% to RMB 1.89 billion (USD 280.9 million). Europe and other regions were the only major overseas segment to grow, with revenue rising 5.9% to RMB 505.7 million (USD 75.2 million).
The weakness was particularly visible online. Online revenue fell 39.8% in the Asia Pacific, 45.6% in the Americas, and 59% in Europe and other regions, even as offline revenue continued to grow in all three markets.
The Shift Towards New IPs and Operations
Pop Mart's IP portfolio is undergoing a significant shift. The Monsters, the franchise that includes Labubu, remained the group's largest IP in the first half, generating RMB 4.45 billion (USD 661.3 million) in revenue. But revenue fell 7.5% year-on-year, while its share of group revenue declined to 26.0% from 34.7% in the first half of 2025.
Twinkle Twinkle was the clearest new growth driver. Its first-half revenue jumped 580.6% to RMB 2.65 billion (USD 393.8 million), increasing its share of group revenue to 15.4% from 2.8% a year earlier and making it Pop Mart's second-largest IP.
Six artist IPs generated more than RMB 1 billion (USD 148.6 million) each during the period, while 11 exceeded RMB 100 million (USD 14.9 million). Crybaby, Dimoo, Skullpanda, and Hirono all recorded double-digit revenue growth, reducing some of the concentration around The Monsters.
Pop Mart has also continued investing in smaller franchises. Nyota was among the IPs to launch its first plush products during the period. Since the start of the year, Pop Mart has released products including Nyota's 'Where Moments Meet' plush line and a Nyota collaboration with Chibi Maruko-chan.
The Importance of Plush Toys
The shift towards plush toys is increasingly important to the group as a whole. Plush toys generated RMB 9.82 billion (USD 1.5 billion) in first-half revenue, up 60.0% year-on-year, and accounted for 57.2% of total revenue. Figure toys generated RMB 5.19 billion (USD 771.3 million), up just 0.3%.
Key points
- Pop Mart's growth slows as overseas sales reverse
- Revenue from China operations increased 100-105% in the first quarter
- The company is relying on new IPs, tighter operations, and shareholder returns to drive growth
- Twinkle Twinkle was the clearest new growth driver, with revenue jumping 580.6% to RMB 2.65 billion
- Pop Mart has also continued investing in smaller franchises, including Nyota
If Pop Mart can successfully shift its focus towards new IPs and operations, it could lead to a resurgence in growth and revenue. The company's investment in smaller franchises and plush toys could also pay off in the long run.
However, if Pop Mart fails to adapt to the changing market and consumer trends, it could lead to a decline in revenue and growth. The company's reliance on Labubu and The Monsters could also become a liability if they continue to decline.
