Shares of MINISO Group Holding Limited (NYSE: MNSO) dropped 5.68% in pre-market trading on Friday after the global value retailer reported mixed fourth quarter results that fell short of revenue expectations.

For the quarter ended December 31, 2024, MINISO posted revenue of RMB4.71 billion ($645.6 million), up 22.7% year-over-year but missing analyst estimates of RMB4.86 billion. The revenue miss came despite strong overseas growth, as the company's performance in mainland China showed signs of slowing. Revenue from MINISO brand in mainland China increased just 6.5% year-over-year in Q4, decelerating from the full year growth rate of 10.9%.

On a more positive note, adjusted earnings per ADS of RMB2.56 ($0.35) beat expectations, rising 20.8% from RMB2.12 in the same period last year. Gross margin also hit a record high of 47.0% for the quarter. However, investors appear to be focusing on the top-line miss and potential growth concerns.

While MINISO's overseas business remained strong with 42.7% year-over-year revenue growth in Q4, the slowdown in its core China market seems to be weighing on investor sentiment. The company opened 460 net new stores in mainland China for the full year, but slowing same-store sales growth could signal challenges ahead in its largest market.

Despite the pre-market drop, MINISO's management struck an optimistic tone about 2025, citing opportunities for same-store sales growth and improved store economics. However, the market reaction suggests investors may need more convincing about the company's growth trajectory, particularly in China, before sentiment improves.