Labubu’s 40% revenue chokehold drags pop mart down 22% as fad fatigue sets in
Pop Mart’s share price cratered 22% overnight after investors balked at a balance sheet that still screams Labubu. The fanged doll now drives 40% of total sales—up from 23% last year—turning a once-diversified toy empire into a one-character bet at the exact moment the TikTok-fuelled frenzy cools.
Revenue beat the street, just not by enough
Headline numbers looked obese: revenue up 185% to 37.1 billion yuan, net profit up 309% to 12.8 billion yuan. But analysts had baked in 38 billion yuan on the top line, and the delta—900 million yuan—is a rounding error that still triggered stop-losses. The real gut-punch came from the dividend policy: payout ratio slashed from 35% to 25%, a move Morningstar’s Jeff Zhang calls “institutional investor disappointment distilled into a single line item.”
Fourth-quarter deceleration sealed the panic. Same-store sales growth dropped to low single digits in china while counterfeit Labubu key-chains flooded Douyin at 2 yuan a pop, gutting resale margins that once hit 400%. Pop Mart’s answer: 42 new U.S. stores in 12 months, pushing American revenue up 748% to 6.8 billion yuan. Yet that 18.3% slice of the pie still drowns under a 40% Labubu dependency—an asymmetry no amount of California sunshine can hide.
The diversification playbook is already late
CEO Wang Ning swears “Pop Mart is more than Labubu,” but the pipeline tells another story. Twinkle Twinkle, the intended successor, remains a niche SKU. Skullpanda did beat estimates at 3.5 billion yuan, yet legacy IPs Crybaby and Molly underperformed so badly that internal forecasts had to be ripped up mid-year. Meanwhile, Wang personally pocketed 17 billion euros in 2025, vaulting past Peter Thiel on a single monoculture hit.
Investors aren’t waiting for the next blind box to prove itself. They’ve seen this movie before—hovering growth, squeezed IP longevity, and a founder richer than the company’s moat. Until Pop Mart proves it can mint another viral phenom at scale, every earnings call will be judged against one question: how much longer can a single sharp-toothed doll carry a 22 billion-dollar narrative?