Shares of Labubu maker Pop Mart dip despite staggering third-quarter U.S. sales growth

Core Viewpoint - Pop Mart's stock has experienced significant volatility, with a recent 9% drop following a peak in late August, despite reporting a substantial increase in third-quarter revenue driven by U.S. sales growth [1][3]. Group 1: Financial Performance - Pop Mart reported a more than threefold increase in third-quarter revenue year over year, with U.S. sales surging between 1,265% and 1,270% [1]. - Since August, Pop Mart's stock has declined by 30%, although it remains up 159% year-to-date [3]. Group 2: Market Concerns - There are growing concerns that the demand for Labubu dolls may be waning, as resale prices on platforms like Qiandao have dropped significantly from previous highs [2][3]. - The resale price of the Labubu character Luck fell from over 500 yuan (approximately $70) to 108 yuan (about $15) [2]. Group 3: Supply and Demand Dynamics - Pop Mart has increased its supply of plush toys tenfold this year, now manufacturing around 30 million units monthly [4]. - Analysts from Morgan Stanley suggest that the second-hand market prices may not accurately reflect the true supply and demand situation due to Pop Mart's efforts to limit scalping [4]. Group 4: Brand Popularity and Growth Opportunities - The popularity of Labubu dolls has been enhanced by endorsements from celebrities like Rihanna and David Beckham [5]. - Emerging characters such as Twinkle Twinkle and global expansion opportunities are also contributing to Pop Mart's growth [5].