Pop Mart's share price is effectively trading on a third-quarter report card that has not yet been officially released.

On October 20, Pop Mart shares fell as much as 5.8% during intraday trading, hitting their lowest level since April 2025, before closing at HK$135.60, down 4.6%.

Including declines over the previous three trading days, the stock has now fallen for four consecutive sessions, with a cumulative drop of about 9.7% over those four trading days.

What's driving the sell-off?

With the company yet to clarify its third-quarter business update schedule, institutional channel tracking data has become an important basis for investors to gauge performance, and expectations of declining sales have further weighed on market sentiment.

A Goldman Sachs channel tracking report released on October 13 showed that Pop Mart's combined sales on Tmall and Douyin fell 30% year-on-year in the third quarter, with a 44% decline in September alone.

The U.S. market was also under pressure, with Goldman Sachs' tracked credit card sales data showing a 58% year-on-year decline in the third quarter and a 50% drop in September.

On October 20, Jeff Zhang, an Asian equity analyst at Morningstar, cited third-party monitoring data saying that Pop Mart's third-quarter sales fell more than 50% year-on-year.

Citi, meanwhile, expects the company's third-quarter group revenue to fall about 35% year-on-year, with the decline narrowing to 17% in the fourth quarter.

These figures are not fully comparable, but they point to the same fact: the market is preparing for a marked decline in Pop Mart's third-quarter sales.

Goldman Sachs noted that in the same period of 2025, the LABUBU "Secret Code" and "High Energy Ahead" series were at peak supply, raising the year-on-year comparison base for this year.

As the high growth driven by last year's hit products gradually exits the comparison window, Pop Mart's sales growth naturally faces pressure.

Beyond the high base

But a high base cannot explain everything.

U.S. credit card sales tracking showed a 58% year-on-year decline in the third quarter, wider than the 53% drop in the second quarter; domestic Tmall and Douyin sales fell 44% year-on-year in September, also significantly weaker than the overall 30% decline in the third quarter.

As a result, market concerns are no longer limited to last year's elevated base.

Whether the growth previously driven by LABUBU can continue, and whether new IPs can contribute a sufficiently large sales scale, are becoming key to shaping Pop Mart's growth expectations.

If new products cannot temporarily fill the gap left by cooling demand for core IPs, sales recovery may take longer even as the high base gradually fades.

Wang Ning had already warned of slowing growth at the interim results conference on August 20.

He described pressure in the second half of 2026 as greater than in the first half and said the company "is very likely to miss the 20% growth target set at the beginning of the year."

But he also stressed that while short-term development faces difficulties, the company remains confident over the long term and will not make decisions harmful to long-term development just to cater to market expectations.

Overseas expansion enters a new phase

Its overseas layout has also entered a phase shifting from pursuing expansion to strengthening operational capabilities.

In the first half of 2026, Pop Mart's overseas revenue fell 11.1% year-on-year, with Asia-Pacific down 9.7% and the Americas down 16.5%, while Europe and other regions grew 5.9%.

During the same period, the company added a net 22 stores in the Americas, 5 in Asia-Pacific and 9 in Europe and other regions.

Management said overseas online channels were affected by traffic returning to normal levels, and that in the future it will place greater emphasis on team building, logistics systems, cross-regional collaboration and store operating quality.

Institutions remain divided

Institutions still differ sharply on how long this round of adjustment will last.

Deutsche Bank maintained a sell rating on October 14 with a target price of HK$115; Goldman Sachs gave a target price of HK$139.5 with a neutral rating.

Citi maintained a buy rating with a target price of HK$198 and said sales recovery may not become more evident until 2027.

At the core of the disagreement is whether Pop Mart's sales decline is a temporary adjustment under a high base or a growth model that needs to be re-validated.

In the short term, that question is likely to remain difficult to settle.