Q1 2025 TH International Ltd Earnings Call Transcript
Key Points
- TH International Ltd (THCH) launched the Light & Fit Lunch Box, a new product line aimed at boosting lunch sales and offering healthy meal options.
- The company improved its store contribution margin and adjusted corporate EBITDA margin by 5.9 and 6.1 percentage points year over year, respectively.
- System sales increased by 3.5% year over year, indicating a positive trend in overall sales performance.
- The number of Loyalty Club Members grew by 25.7% year over year, reaching 25.2 million, which is a strong indicator of customer engagement.
- Revenue from the franchise and retail business increased by 28.6% year over year, showcasing the success of their franchise model.
- Company-owned and operated store revenue dropped by 14.0% year over year due to the closure of underperforming stores and a decrease in same-store sales growth.
- The Chinese consumer sentiment did not improve significantly post-Chinese New Year, affecting overall sales performance.
- The company faced intense market competition, particularly in the coffee segment, impacting pricing strategies.
- Same-store sales growth decreased by 6.5% year over year, reflecting challenges in maintaining consistent sales across existing locations.
- The company had to close 18 stores, including 10 non-made-to-order stores, indicating challenges in maintaining a profitable store network.
Ladies and gentlemen, welcome to Tim's China first-quarter 2025 earnings conference call. All participants will be in the listen-only mode during management 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 Gemma Bakx, who will head Tim's China's Investor Relations efforts for preparing marks and introduction. Please go ahead, Gemma.
Thank you very much, Desmond. Hello, everyone, and thank you for joining us on today's call. My name is Gemma Bakx, Head of Investor Relations, and here to say that Tim's China today announced its first quarter, 2025 financial results earlier today. A press release, as well as an accompanying presentation which contains operational and financial highlights are now available on the company's IR website at ir.timschina.com.
Today, you will hear from Yongchen Liu, our CEO and Director, and Albert Li, our CFO. After the company's
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