Th International Limited ((THCH)) has held its Q2 earnings call. Read on for the main highlights of the call.
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TH International Limited’s recent earnings call painted a picture of both growth and challenges. The company reported significant advancements in food revenue, loyalty memberships, and digital orders. However, these positives were tempered by declines in company-owned store revenues and rising operational costs, such as rental and delivery expenses. Despite these hurdles, there is a sense of optimism about improving same-store sales and operational efficiencies in the future.
Food Revenue Increase
The company experienced an impressive 8.6% increase in food revenue year over year. This growth pushed food revenue contribution to a historical high of 35.2% of total sales, up from 32.5% in the previous year.
Profits from Other Revenues
Profits from other revenue streams saw a remarkable year-over-year increase of 110.3%, showcasing the company’s ability to diversify its income sources effectively.
Expansion of Store Footprint
TH International Limited expanded its store footprint significantly, now operating in 98 cities. Since the launch of the franchisee program in December 2023, over 400 stores have been converted, marking a substantial growth in their physical presence.
Growth in Loyalty Membership
The company’s loyalty program has been a success, with registered loyalty club members reaching 26.2 million, reflecting a 22.4% growth compared to the previous year.
Improved Digital Order Metrics
Digital orders have become a major component of the company’s operations, with their share rising to 90.4% of total orders in Q2 2025, up from 86.5% in Q2 2024.
Reduction in General and Administrative Expenses
The company managed to reduce its general and administrative expenses by 5.2% year over year, indicating improved operational efficiency.
Decrease in Company-Owned Store Revenues
Revenues from company-owned stores dropped by 12.5% year over year, primarily due to the planned closure of underperforming stores and a 3.6% decrease in same-store sales growth.
Increase in Rental and Property Management Fees
Rental and property management fees increased by 0.9 percentage points as a percentage of revenues, highlighting rising operational costs.
Increase in Delivery Costs
Delivery costs rose by 1.8 percentage points, reaching 11.8% in 2025 compared to 10% in 2024, due to a higher delivery revenue mix.
Forward-Looking Guidance
Looking ahead, TH International Limited aims to continue its growth trajectory by opening around 200 franchise stores in 2025. The company is focused on sustainable growth and profitability, with plans to enhance its store contribution margin and adjusted corporate EBITDA margin. Despite the drop in company-owned store revenues, the franchised business revenues increased by 50.7%, indicating a strategic shift towards a more profitable business model.
In summary, TH International Limited’s earnings call highlighted a mix of growth and challenges. While the company faces rising operational costs and a decrease in company-owned store revenues, its strong performance in food revenue, loyalty memberships, and digital orders provides a solid foundation for future growth. The company’s forward-looking guidance suggests a focus on sustainable expansion and profitability, which could bode well for its long-term prospects.