MINISO Group Holding Limited (NYSE: MNSO) saw its stock price plummet 10.63% in pre-market trading on Friday, as investors reacted to the company's fourth quarter and full year 2024 financial results.

The global value retailer reported solid annual growth, with revenue for the full year 2024 increasing 22.8% year-over-year to RMB16,994.0 million (US$2,328.2 million). Gross profit rose 34.0% to RMB7,637.1 million (US$1,046.3 million), with gross margin reaching a record high of 44.9%, up from 41.2% in 2023.

However, several factors appear to have contributed to the sharp stock decline:

1. Revenue miss: For the fourth quarter, MINISO reported sales of RMB4.71 billion, which missed analyst estimates of RMB4.86 billion by 3.13%. This shortfall in the crucial holiday quarter likely raised concerns about the company's growth trajectory.

2. Margin pressure: While gross margin improved, the company's adjusted net margin declined slightly to 16.0% in 2024 from 17.0% in 2023. This could be due to increased operating expenses, particularly in selling and distribution, which rose 54.3% year-over-year.

3. Slowing growth in mainland China: Revenue growth from MINISO brand in mainland China was 10.9% for the full year, which, while still strong, represents a significant deceleration from the 36.2% growth seen in 2023. As China remains a key market for MINISO, this slowdown may have worried investors about future growth prospects.

Despite these concerns, it's worth noting that MINISO's long-term growth story remains intact. The company achieved the milestone of 3,000 overseas stores and added a record 1,200 net new stores globally in 2024. Additionally, MINISO returned RMB1,574.5 million to shareholders through dividends and share repurchases in 2024, demonstrating confidence in its financial position.

Investors will likely be closely watching MINISO's performance in the coming quarters to see if the company can address the revenue shortfall and maintain its growth momentum, particularly in its home market of China.