Th International Limited ( (THCH) ) has released its Q1 earnings. Here is a breakdown of the information Th International Limited presented to its investors.
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TH International Limited, operating as Tims China, is the exclusive master franchisee of Tim Hortons coffee shops in mainland China, Hong Kong, and Macau, focusing on providing coffee and freshly prepared food with a commitment to local relevance and innovation.
In the first quarter of 2025, Tims China reported a mixed financial performance, with a 3.5% increase in system sales year-over-year, despite a 9.5% decline in total revenues compared to the same period last year. The company also noted a significant growth in its loyalty club membership, reaching 25.1 million members, marking a 25.7% increase from the previous year.
Key financial metrics revealed a 5.9 percentage point improvement in the contribution margin of company-owned and operated stores, although total revenues decreased to RMB300.7 million. The company opened a net of nine franchised stores while closing seven company-owned locations, reflecting a strategic shift towards franchising. Additionally, Tims China achieved a 34.5% increase in profits from other revenues, driven by its expanding franchise business.
Despite the revenue decline, Tims China managed to cut its adjusted corporate EBITDA loss by nearly 50%, demonstrating improved operational efficiencies. The company also reduced its net loss from continuing operations to RMB58.9 million, a significant improvement from the RMB134.7 million loss in the same quarter of the previous year.
Looking ahead, Tims China remains focused on enhancing operational efficiencies and expanding its sub-franchising model. The management is optimistic about further optimizing store unit economics and driving traffic through innovative product offerings, aiming for sustained profitable growth in the coming quarters.