Mixue Bingcheng’s 2025 results showed that it was still expanding quickly, but the more telling figure was a decline in gross margin in the goods and equipment business that underpins its franchise model and generates almost all of its revenue.

Revenue rose 35.2% year-on-year to RMB 33.56 billion (USD 4.9 billion), while annual profit increased 33.1% to RMB 5.93 billion (USD 858.8 million). Its store network reached 59,823 locations, up from 46,479 a year earlier, extending its lead in China’s mass-market drinks segment.

That scale matters because Mixue operates primarily through franchisees rather than company-run stores. As a result, it earns far more from supplying ingredients, packaging, and equipment than from collecting franchise fees.

The 2025 results reinforced that structure. Sales of goods and equipment rose 35.3% to RMB 32.77 billion (USD 4.7 billion), while franchise and related services revenue increased 28% to RMB 793.9 million (USD 115 million). Fees and related services therefore accounted for just 2.4% of total revenue, leaving Mixue much closer to a supply chain operator serving franchisees than to a conventional franchisor.

That is why the margin trend stood out. Gross margin in goods and equipment fell to 29.9% from 31.2%, which the company attributed to changes in revenue mix and higher procurement costs for some raw materials. Franchise and related services became more profitable, with gross margin rising to 82.6% from 80.4%, but that business remained too small to offset pressure in the supply chain operation.

The expansion story was also driven mainly by China rather than overseas markets. Stores in mainland China rose to 55,356 from 41,584, and 58% of that network was in third-tier cities and below. By contrast, stores outside mainland China fell to 4,467 from 4,895. Mixue said it was optimizing existing stores in Indonesia and Vietnam even as it entered Kazakhstan and the US, suggesting that overseas growth remained uneven.

Part of the increase in store count also came through acquisition. Mixue added 1,354 franchised stores through its purchase of the Fulujia beer brand, while franchised store closures rose to 2,527 from 1,609 a year earlier. That does not undermine the company’s overall expansion, but it does make the underlying store picture less straightforward than the headline number suggests.

Its balance sheet remained a point of strength. Cash, time deposits, restricted cash, and financial assets measured at fair value through profit or loss rose to RMB 19.99 billion (USD 2.9 billion) from RMB 11.11 billion (USD 1.6 billion), supported by operating cash flow and IPO proceeds, while interest-bearing bank borrowings stood at just RMB 28.2 million (USD 4.1 million). Mixue also said its smart dispensing machines had been rolled out to more than 13,000 stores by the end of 2025 as part of a broader effort to improve store efficiency.

Note: RMB figures are converted to USD at rates of RMB 6.91 = USD 1 based on estimates as of March 26, 2026, unless otherwise stated. USD conversions are presented for ease of reference and may not fully match prevailing exchange rates.