Q1 2026 TH International Ltd Earnings Call Transcript
Key Points
- TH International Ltd (THCH) has successfully launched its 2026 nationwide franchise load-share program, attracting over 10,500 applications and signing up over 440 stores, showcasing strong market confidence in its franchise model.
- The company has seen strong performance from its 2024 and 2025 vintage stores, with store contribution margins reaching nearly 15% in 2025 and expected payback periods within two to three years.
- TH International Ltd (THCH) has expanded its presence across diversified locations, including transportation hubs and university campuses, enhancing brand penetration and consumer reach.
- The company has introduced upgraded franchise support policies, including multi-store incentives and high revenue rebates, to attract high-quality partners and lay a foundation for long-term scalable expansion.
- Digital orders as a percentage of total orders increased to 87.5% in Q1 2026, reflecting enhanced digital capabilities and growing demand for delivery and takeaway services.
- TH International Ltd (THCH) experienced a 14.6% year-over-year drop in total revenues and a 14.2% decrease in system sales, primarily due to the closure of underperforming stores and a decline in same-store sales growth.
- Same-store sales growth faced pressure, with an overall comparable transaction decline of 8.3% and average comparable ticket size decline of 4.8%, leading to a negative 13.2% same-store sales growth.
- The company faced increased competition from tea players entering the coffee business with lower-priced offerings, potentially impacting its business strategy.
- Rental and property management fees as a percentage of revenues from company-owned and operated stores increased by 0.7 percentage points, indicating higher costs relative to revenue.
- Adjusted corporate EBITDA margin was negative 11.8% in Q1 2026, compared to negative 9.8% in the same quarter of 2025, highlighting ongoing financial challenges.
Ladies and gentlemen, welcome to Teams China's First Quarter 2026 Earnings Conference Call. All participants will be in listen-only mode during management's prepared remarks, and there will be a question-and-answer session to follow. Today's conference is being recorded. At this time, I'd like to turn the call over to Patty Yu, Teams China's Public and Media Relations Manager, for prepared remarks and introductions. Please go ahead, Patty.
Hello everyone, and thank you for joining us on today's call. THC International Limited announces its first quarter 2026 financial results only today. A press release as well as a company presentation which contains operational and financial highlights are now available on the complex IR website at ir.teamchina.com.
Today, you will hear from Yongchen Lu, our CEO director, and Albert Lee, our CFO. After the convey's prepared remarks, the management team will conduct a question-and-answer session. You will find the webcast of today's earnings call on
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