In This Article:
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Adjusted Corporate EBITDA Profitability: Achieved for the second consecutive quarter.
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Store Contribution Margin: Highest ever at 13.3%, with a year-over-year margin expansion of 5.8 percentage points.
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Revenue: Total revenue of RMB 7.6 million in Q3 2024.
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Cash and Cash Equivalents: RMB 203.7 million (USD 29.1 million) as of September 30, 2024.
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Monthly Average Transacting Customers: 3.3 million in Q3 2024, a 2.4% increase from Q3 2023.
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Digital Orders: Increased to 86.6% of total orders in Q3 2024, up from 82.6% in Q3 2023.
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Food and Packaging Costs: Reduced by 6.1 percentage points as a percentage of revenues from company-owned and operated stores year-over-year.
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Labor Costs: Reduced by 3.0 percentage points as a percentage of revenues from company-owned and operated stores year-over-year.
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Marketing Expenses: Decreased by 2.3 percentage points as a percentage of total revenues year-over-year.
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General and Administrative Expenses: Reduced by 2.7 percentage points as a percentage of total revenues year-over-year.
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Store Network Expansion: 539 stores renovated for made-to-order food preparation by the end of October 2024.
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Franchising Growth: 43 new stores opened and 94 additional signed since the program launch.
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Registered Members: 22.8 million globally, reflecting a 35.3% year-over-year growth.
Release Date: November 12, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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TH International Ltd (NASDAQ:THCH) achieved its highest ever quarterly company-owned and operated store contribution margin of 13.3%, indicating improved operational efficiencies.
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The company maintained Adjusted corporate EBITDA profitability for the second consecutive quarter, showcasing financial stability.
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TH International Ltd (NASDAQ:THCH) has successfully launched a sub-franchising program, receiving over 5,000 applications and opening 43 new stores, which supports its expansion strategy.
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The loyalty program has grown significantly, with 22.8 million registered members, reflecting a 35.3% year-over-year increase, enhancing customer retention.
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The introduction of innovative products, such as low-calorie bagels and plant-based options, aligns with consumer health trends and has been well-received, boosting brand visibility.
Negative Points
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The ongoing price competition in the Chinese coffee market poses a challenge, potentially impacting profit margins.
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Despite the growth in digital orders, the company faces pressure to continually enhance its digital capabilities to meet rising consumer expectations.
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The capital required for company-owned stores remains significant, with a payback period of 2 to 3 years, which could strain financial resources.
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The expansion into new cities requires careful selection of partners and locations, which may slow down the pace of growth.
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Marketing expenses, although reduced, still represent a considerable portion of total revenues, necessitating efficient allocation to maintain profitability.