Th International Limited’s Earnings Call Highlights Growth Amid Challenges

Th International Limited ((THCH)) has held its Q3 earnings call. Read on for the main highlights of the call.

The recent earnings call of Th International Limited painted a picture of both robust growth and significant challenges. The company reported strong growth in system sales and loyalty program membership, alongside successful expansion in food and delivery revenues. However, it also faces hurdles with declining revenues from company-owned stores and increased costs, resulting in a negative EBITDA margin.

Positive Net New Store Openings

Th International Limited has returned to positive net new store openings, maintaining strong momentum in system sales with a 12.8% year-over-year growth. This indicates a successful strategy in expanding their market presence and increasing consumer reach.

Growth in Food and Delivery Revenues

Food revenues saw a significant increase of 24.2% year-over-year, while delivery revenues rose by 23.1%. This growth highlights the company’s successful adaptation to consumer demand for convenience and variety in their offerings.

Increase in Registered Loyalty Club Members

The company’s loyalty program has been a standout success, with membership reaching 27.9 million, a remarkable 22.3% year-over-year growth. This reflects strong customer engagement and brand loyalty.

Expansion of Franchise Program

The franchise program has attracted over 8,400 applications, with more than 300 stores converted by the end of September. This expansion is a testament to the brand’s appeal and the potential for further growth through franchising.

Drop in Company-Owned and Operated Store Revenues

Revenues from company-owned and operated stores dropped by 5.5% year-over-year due to the planned closure of underperforming stores. This strategic move aims to streamline operations and focus on more profitable locations.

Increased Costs and Negative EBITDA Margin

The higher delivery revenue mix has led to increased delivery costs, resulting in a negative EBITDA margin of 4.2% in Q3 2025, compared to a positive 0.6% in Q3 2024. This highlights the financial pressure from rising operational costs.

Forward-Looking Guidance

Looking ahead, Tims China remains optimistic about its growth trajectory. The company achieved a 12.8% increase in system sales and a 3.3% growth in same-store sales in the third quarter of 2025. With food revenues now making up 36.5% of total sales, and delivery orders increasing by 20.9%, the company is poised for continued growth. Despite higher delivery costs, the adjusted store contribution margin remains stable at 8.1%. The company aims to enhance operational efficiencies and expects to achieve double-digit store level margins next year.

In conclusion, Th International Limited’s earnings call revealed a company that is growing and expanding in several key areas, despite facing challenges with increased costs and declining revenues from certain segments. The overall sentiment is positive, with a clear focus on strategic growth and operational efficiency to drive future success.