Mixue Shares Slide as Rising Costs Put Pressure on Profit

Mixue shares fell more than 7% in Hong Kong on Friday, extending losses after an 8.37% decline in the previous session. Investors reacted to weaker profitability even as the company continued to generate modest revenue growth.

For the six months ended June, Mixue reported revenue of 15.22 billion yuan, up 2.3% from a year earlier. Profit, however, declined 14.7% to 2.32 billion yuan, highlighting growing pressure on margins.

Costs increased faster than sales during the period. Mixue said its cost of sales rose partly because of investments designed to improve product quality, while selling and distribution expenses jumped 22.9% due to higher marketing and staffing costs.

Administrative expenses increased even faster, rising 39.4%, primarily because of higher staff costs. The spending suggests Mixue is investing heavily in the infrastructure and organization required to support its rapidly expanding business.

Despite weaker earnings, Mixue proposed a special dividend of 2.65 yuan per share, subject to shareholder approval. The payout comes as the company balances shareholder returns with significant spending on its next phase of expansion.

Mixue has already built one of the world’s largest food-and-beverage retail networks. The company operated 63,987 stores globally at the end of June, giving it more locations than McDonald’s and more than four times as many as Dunkin’.

Mainland China remains its dominant market, but international expansion is becoming increasingly important. Mixue had 4,378 overseas stores by the end of June and is targeting deeper penetration across Southeast Asia while expanding further into Central Asia and the Americas.

Supporting that international push will require greater localization. Mixue plans to develop more localized supply chains in overseas markets, which could strengthen its ability to scale while adapting products and operations to different consumer preferences.

The company is also seeking to extend its brand beyond affordable drinks and ice cream. Mixue plans to develop its recognizable Snow King mascot into a broader cultural franchise spanning animation, comics, movies, merchandise and potentially theme parks.

Mixue’s enormous store network gives it significant scale, but its latest results highlight the cost of sustaining that growth. As the company expands internationally and invests in product quality, marketing and brand development, investors will be watching whether faster revenue growth can eventually offset rising expenses and restore profit momentum.