This article first appeared on GuruFocus .
Release Date: June 05, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Here Group Ltd ( NASDAQ:HERE ) achieved RMB165 million in revenue for the quarter, exceeding the high end of their guidance.
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The company reported a gross margin improvement to 34.5% from 31% in the previous quarter, reflecting effective cost management.
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Wakuku, the flagship IP, contributed RMB102 million in revenue, accounting for 52.2% of total revenue.
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The company is expanding its offline presence with seven D2C brand stores and 15 RoboShops, enhancing brand reach and user interaction.
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Here Group Ltd ( NASDAQ:HERE ) is focusing on long-term IP development, with a diversified portfolio of 20 IPs, including 12 proprietary and 8 exclusive licensed IPs.
Negative Points
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Total revenue decreased from the previous quarter's RMB177.3 million, indicating a decline in sales.
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The company reported a net loss of RMB34.1 million, an increase from RMB25.4 million in the previous quarter.
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Sales and marketing expenses increased to 35% of total revenue from 29.6% in the previous quarter, impacting profitability.
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The market environment remains challenging, with a cooling down in the pop toy industry due to rapid supply chain growth.
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Here Group Ltd ( NASDAQ:HERE ) revised its fiscal year 2026 revenue guidance to a range of RMB600 million to RMB610 million, reflecting near-term market challenges.
Q & A Highlights
Q: Could management elaborate on changes in consumer demand within the PopToy market and how competition has shifted? A: (CFO) Emotional consumption is driven by companionship and collectible value. Consumers seek products with character and solid operations. The market has cooled due to rapid supply chain growth, leading to a correction. The focus is shifting from scarcity to emotional connection. Competition is moving towards ecosystem capabilities, with a focus on self-owned IPs and long-term partnerships.
Q: How does the company plan to maintain the momentum of its successful IPs? A: (CEO) IP momentum relies on characteristics and successful operations. We focus on core IPs, delivering consistent events and experiences. We strengthen user engagement through high-quality products and expand into new categories. Partnerships and offline touchpoints are crucial for maintaining IP influence.
Q: What are the company's plans for category expansion in the future? A: (CEO) We explore category expansion by extending from our IPs, focusing on merchandise, disciplined expansion, and smart companionship. We aim to transform IPs into everyday companions and align expansion with user needs, rather than broad SKU coverage.
Q: What is the company's strategy for global expansion? A: (CEO) We plan a measured pace for global expansion, starting with a pop-up store in South Korea and participating in a US trade show. We aim to optimize business cooperation with channel partners for mutual benefits and promote IPs and products effectively.
Q: How is the company addressing the challenging market environment? A: (CFO) Despite a softer demand environment, we exceeded expectations in revenue and gross margin. We focus on strategic cost management and core IP portfolio to position for sustainable growth. We revised fiscal year 2026 revenue guidance to reflect market realities and maintain transparent guidance.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
