Chinese variety store chain Miniso (MNSO) had the 14th-highest bearish price surprise on Monday, with a standard deviation of -2.99; its shares fell nearly 10%, their lowest point since November 2022.
It's been a while since I've looked at this volatile retail stock, but given how far MNSO has fallen, I can't help but wonder whether it is oversold or simply trading where it ought to.
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The last time I wrote about Miniso was in August 2023. Miniso was one of three retail stocks hitting new 52-week highs. The other two were Guess and TJX Companies (TJX). Two weeks later, MNSO hit an all-time high of $29.92; it's down 69% since.
Of the three, I'll always go with TJX as the better buy-and-hold stock. Its business model has been perfected over years of focus and commitment.
Morningstar.com recently discussed how to decide if a stock is worth renting or owning. It helps explain why aggressive investors might want to consider renting rather than owning Miniso.
One of the things Morningstar's Chief Market Strategist Dave Sekera says about renting versus owning is that the former is often a stock with a low valuation and a temporarily discounted share price. Still, it's not something whose value will compound over decades.
I think Miniso has proven to be that kind of stock.
Since its IPO in October 2020, its shares have traded over $25 on four occasions: Feb. 2021, Sept. 2023, Jan. 2025, and Sept. 2025. It also traded below $5 in Oct. 2022. If you rented MNSO over the next 11 months, by Sept. 2023, you would have had an annualized return of 571%.
I've followed retail closely for many years. My wife worked in multi-store management for two decades. I've seen a lot of volatility. Trendy retail stocks come and go. Miniso could be one of those stocks.
"When I think about sectors that you would prefer to rent stocks versus own, first of all, it would be any of those sectors where you see what we consider just to be a long-term structural decline," Sekera says. "I mean, if you think about traditional media, certain types of retail, those would be areas where you might have temporary valuations get too low, but the sector overall is going to be on that long-term downward trend…"
Is Miniso operating in a retail segment that's in a long-term downward trend? If the retailer's Q2 2026 report is indicative, the answer could be yes.
The company reported its Q2 2026 results on Aug. 28 before the markets opened. By yesterday's open, it had lost nearly 15% of its value. As I write this on Tuesday morning, it has clawed back some of those losses.
