Shares of Mixue Group, a China-based beverage and ice cream chain, fell for a second consecutive day in Hong Kong trading on Friday. The decline followed the company’s announcement on Thursday that its profit for the first half of the year decreased, which it attributed to rising operational costs.
According to a financial report released by the company, Mixue’s profit for the six months ending in June fell 14.7% year-on-year to 2.32 billion yuan ($345.2 million). During the same period, revenue increased by 2.3% to 15.22 billion yuan. The company also announced a proposed special dividend of 2.65 yuan per share, which is pending shareholder approval.
In its filing, Mixue Group detailed the factors contributing to the lower profit margin. The company stated that its cost of sales grew at a faster rate than its revenue, linking the increase to investments made to improve product quality. Selling and distribution expenses rose by 22.9%, a change the company attributed to higher marketing and staffing costs. Additionally, administrative expenses increased by 39.4%, primarily due to higher staff costs.
As of the end of June, Mixue Group operated 63,987 stores globally, with the majority located in mainland China. The company reported having 4,378 stores outside of China at that time.
Looking forward, the company outlined its strategic plans for expansion and brand development. Mixue stated it intends to increase its presence in Southeast Asia while expanding into markets in Central Asia and the Americas. The company also noted plans to develop more localized supply chains to support its international operations.
Beyond its core beverage and food business, Mixue announced intentions to develop its “Snow King” mascot into a global brand. The company’s plans include creating animated content, films, merchandise, and theme parks centered on the character.
