The shares of Pop Mart (HKG: 9992), the Beijing-based maker of the viral Labubu toys, dropped as much as 22.51% on Wednesday, March 25, following the release of the company’s 2025 annual report.
While full-year results met market expectations, the report failed to convince investors of sustained growth beyond The Monsters, i.e., Labubu IP, intensifying concerns about reliance on a single franchise.
Revenue from the line surpassed the 10-billion-yuan (~$1.45 billion) milestone for the first time, reaching 14.16 billion yuan, a remarkable 365.7% year-on-year surge. As a result, Pop Mart’s total annual revenue climbed to 37.12 billion yuan (~$5.38 billion), up 184.7% from a year earlier.
Even so, the company’s strong financial performance has not eased investor concerns. That is, while the toy-maker has outlined some diversification plans, the latest report suggests it will be a long time before another franchise can rival Labubu, which accounted for 38% of total annual revenue.
“Bulls focused on ongoing IP monetization and overseas growth, bears question durability and cycle risk. Earnings did little to close that gap,” said Billy Leung, analyst at Global X ETF, as reported by CNBC.
At press time, Pop Mart shares were trading at $168.30, the crash sending the prices down 12.84% year-to-date.
Labubu stock crashes despite blockbuster annual results; What comes next?
The decline in the stock also reflects a longer period of cautious sentiment that has lingered since last year. However, CEO Wang Ning attempted to reassure investors during the earnings call, insisting the company’s future extends beyond Labubu.
For example, Pop Mart is now pushing into the home appliance market, marking a notable step in its efforts to diversify beyond its core blind box toy business. Speaking at the 2025 earnings briefing, COO Sid Si mentioned the new products could come as early as next month.
The company is also preparing to scale its dessert venture. After testing the concept at Pop Mart City Park in Bangkok, the management aims to open standalone offline dessert stores in the first half of the year.
As for the future of Labubu, the franchise is now set to come alive on the big screen thanks to a collaboration with Sony Pictures. Given the IP’s popularity, a high-budget movie adaptation is naturally expected to boost sales further.
Featured image via Shutterstock
