SUPER HI INTERNATIONAL HOLDING LTD. Sponsored ADR ((HDL)) has held its Q1 earnings call. Read on for the main highlights of the call.
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Super Hi International Holding Ltd.’s latest earnings call struck an upbeat tone, highlighting solid revenue growth, improving margins and stronger cash generation despite currency headwinds and pockets of regional softness. Management framed the quarter as proof that disciplined expansion and operational fine‑tuning are beginning to pay off across its global hot pot network.
Revenue Growth Driven by Core Restaurants and New Streams
Total revenue climbed 14.2% year over year to RMB 226 million, powered mainly by the Haidilao restaurant business and new revenue streams. Management underscored that both in‑store dining and emerging businesses contributed, signaling a healthier and more diversified top line mix.
Haidilao Restaurants Show Steady Recovery
Haidilao restaurant revenue reached RMB 204 million, up 8.4% from a year earlier and accounting for over 90% of group sales. Same‑store sales rose around 4%, pointing to ongoing recovery in mature locations and better in‑store performance rather than just expansion‑led growth.
Customer Traffic and Table Turns Edge Higher
Customer visits exceeded 8.1 million, an increase of 3.8% year over year, while table turnover improved to four turns per day, up 0.1. These metrics suggest stores are handling more diners and using capacity more effectively, supporting revenue growth without aggressive store openings.
Delivery and Other Businesses Surge
Delivery revenue jumped 82.5% to RMB 7.3 million, reflecting strong demand for off‑premise hot pot. Other businesses, including food products, seasonings, central kitchen sales and new brand incubation, surged 166.7% to RMB 14.4 million, further diversifying the company’s revenue base.
Operating Profit and Margins Move Up
Operating profit came in at roughly HKD 13.99 million, translating into a 6.2% operating margin, up about 2.6 percentage points from last year. Management credited better operating leverage and efficiency gains, marking a clear step‑up in profitability even amid investment spending.
Cash Generation Strengthens
Operating cash flow grew 23.1% year over year to HKD 24.24 million, underscoring improved cash generation from the core business. This stronger inflow provides additional flexibility to fund selective expansion and brand incubation while maintaining operational resilience.
Cost Structure Continues to Improve
Gross margin held at a high 66.1%, edging up 0.1 percentage point year over year, while employee costs fell to 34% of revenue, down 1.3 points. Utilities, depreciation and other expenses also eased as a share of sales, reflecting better fixed‑cost dilution as volumes increase.
East Asia Emerges as a Standout Region
East Asia delivered standout numbers, serving about 1.3 million customers, up 18.2% from a year earlier, with table turnover rising to 5.1 turns. Same‑store sales in the region jumped roughly 10.6%, making East Asia a key growth and profitability driver for the group.
Membership Engine Fuels Loyalty and Repeat Visits
Overseas membership grew to 9.05 million, with members contributing more than 92% of table turns, illustrating deep customer engagement. More than 20% of spending came from newly registered members, and roughly one third of member spend came from repeat customers within three months, supporting recurring demand.
Red Pomegranate Incubation Expands Brand Portfolio
Under the Red Pomegranate project, the company now operates 10 brands across 18 prototype or second‑brand stores in markets such as Canada, Indonesia, Japan and Korea. Management highlighted this incubation platform as a key lever for long‑term revenue diversification beyond the core hot pot format.
Foreign Exchange Hits Reported Net Profit
Net profit was notably affected by currency swings, with a net foreign exchange loss of about HKD 4.292 million this quarter versus a HKD 7.435 million gain last year. This roughly HKD 11.73 million adverse shift significantly dampened reported earnings, masking the underlying operational improvement.
Cash Reserves Dip on Investment Spending
Cash reserves declined to HKD 240 million from HKD 270 million at the end of 2025, a drop of around 11.1%. Management attributed the reduction mainly to investments in new stores and second‑brand development, which modestly reduced the short‑term liquidity cushion while supporting future growth.
North America Faces Weather and Ramp‑Up Challenges
In North America the company served roughly 1.0 million customers, essentially flat year over year, but same‑store sales fell about 5.1%. Table turnover slipped from 4.0 to 3.6 turns, as extreme winter weather and the early ramp‑up phase of newly opened stores weighed on performance.
Geopolitical Risks Pressure Other Regions
Other regions, including the Middle East, saw table turnover decline by 0.4 turns year over year amid geopolitical volatility. Management responded with tighter local cost controls and a more cautious stance, acknowledging heightened regional operational risk in these markets.
Lower‑Margin B2B Sales a Mixed Blessing
External sales from the central kitchen to business customers increased, but these B2B revenues carry lower gross margins than restaurant sales. Management warned that order volatility and weaker fixed‑cost absorption mean this channel, if scaled too fast, could pressure overall profitability.
Disciplined Approach to New Store Openings
The company opened only one new overseas Haidilao restaurant in the quarter, located in Southeast Asia, underlining its strict site selection criteria. While a double‑digit pipeline exists, there is no plan for an aggressive near‑term rollout, which may limit rapid scale benefits but supports quality control.
Seasonality and Off‑Season Demand Risks
Management flagged the entry into the traditional hot pot off‑season and region‑specific issues such as North American winter as near‑term headwinds. To counter seasonal softness, the company is leaning on menu, product and marketing initiatives designed to smooth demand throughout the year.
Guidance: Quality First, Measured Expansion Ahead
Looking ahead, management reiterated a “quality first, growth second” approach, focusing on balanced expansion, membership monetization and operational upgrades across customer experience, network, operations, new businesses and headquarters capabilities. The company plans to advance its double‑digit store pipeline and Red Pomegranate incubation while maintaining tight site selection, prudent regional cost controls and labor‑efficiency measures that protect service levels.
Super Hi’s call painted a picture of a restaurant group gaining operational traction, with healthier sales, stronger margins and rising cash flow offsetting FX noise and regional bumps. For investors, the key takeaways are a disciplined growth strategy, deepening customer loyalty and growing ancillary businesses that together support a constructive medium‑term outlook.