TH International Limited (THCH) Earnings
TH International Limited is expected to report next earnings on September 2, 2026 (in NaN days), with a consensus EPS estimate of $-0.18. THCH has beaten EPS estimates in 1 of its last 6 reported quarters (average surprise -33.9% over the last four).
| Report date | EPS est | EPS actual | Surprise | Revenue | Rev. surprise |
|---|---|---|---|---|---|
| Jun 9, 2026 | $-0.18 | $-0.30 | -64.9% | — | — |
| Dec 9, 2025 | $-0.14 | $-0.23 | -59.0% | $50M | -9.4% |
| Aug 26, 2025 | $-0.17 | $-0.17 | +1.0% | $49M | -9.8% |
| Jun 24, 2025 | $-0.26 | $-0.29 | -12.6% | $41M | -16.2% |
| Aug 29, 2024 | $-0.36 | $-0.20 | +45.1% | $50M | -16.9% |
| Jun 5, 2024 | $-0.33 | $-0.45 | -38.3% | $48M | -26.5% |
| Nov 15, 2023 | — | $-0.45 | — | $60M | — |
| Aug 29, 2023 | — | $-0.40 | — | $57M | — |
| Apr 6, 2023 | — | $-0.55 | — | $49M | — |
| Mar 14, 2023 | — | $-0.33 | — | $44M | — |
| Nov 29, 2022 | — | $-0.14 | — | $43M | — |
| Aug 11, 2022 | — | $-0.20 | — | $35M | — |
Source: company filings + earnings calendar. For informational purposes only — not investment advice.
Earnings call summary
Q1 FY2026 · June 9, 2026
AI summary of management’s prepared remarks and analyst Q&A. For informational purposes only — not investment advice.
Management highlights
- Strategic Transition: The company is shifting its priority from scale growth to quality-focused growth. It proactively reduced discount-driven promotions during the Q1 2026 seasonal coffee industry slowdown, reallocating resources to franchise system development and long-term profitability. The company is in the process of pruning underperforming stores, with this process expected to complete by the end of 2026, and new store openings set to resume in Q2 2026. - Franchise Expansion Progress: Since launching individual franchising in December 2023, the company had received over 10,500 franchise applications, signed agreements for over 440 stores, and opened nearly 260 stores by the end of March 2026. In Q1 2026, the company launched the 2026 Nationwide Franchise Leadership Program to communicate operational standards to potential partners, and introduced upgraded support policies including multi-store incentives, high-revenue rebates, and opening support packages to attract high-quality partners. New stores are being opened via sub-franchise partnerships in high-potential emerging markets across diversified high-traffic locations to increase brand penetration. - Product Innovation: In Q1 2026, the company launched 21 new products (15 beverages, 6 food items) focused on seasonal themes, health-conscious preferences, and localized flavors. Notable high-performing launches include the returning cherry beverage series, the spring apple cereal beverage, and localized non-chicken bagel sandwiches. New low-sugar, low-carb offerings were also introduced to align with consumer health trends. - Brand and Loyalty Growth: The company executed cross-over marketing collaborations with popular drama IPs, airlines, and streaming platforms to boost engagement among younger consumers. A customer acquisition partnership with DD added approximately 4 million new members in Q1 2026, representing 3x YoY growth. As of March 31 2026, total loyalty club members exceeded 35.9 million, up 42.9% YoY, and transacting members under 30 accounted for nearly 50% of total transacting members. Average members per store now exceed 35,000. - Operational Improvements: Digital orders increased to 87.5% of total orders in Q1 2026, up from 86.3% YoY, and total delivery orders grew 10.2% YoY. Supply chain optimization and economies of scale reduced food and packaging costs for company-owned stores by 2.0 percentage points YoY. - Leadership Transition: Effective June 15 2026, current CEO Yongcheng Liu will move to the role of Chairman, and John Chen will take over as CEO, bringing over 25 years of consumer industry experience in China and Asia to lead the next phase of growth.
Guidance
- Store pruning: The process of closing underperforming stores will be completed by the end of 2026, and new store openings will resume starting in Q2 2026. - Same-store sales: Management expects same-store sales performance to improve sequentially in Q2 2026, with much stronger performance for the remainder of 2026 following recent weak results in Q1. - Store contribution margins: Management expects overall store contribution margin profiles to improve gradually from current Q1 2026 levels, driven by same-store sales recovery, a higher proportion of newer higher-margin 2024/2025 vintage and special channel stores, and continued gross margin improvement from supply chain optimization. - Long-term corporate target: The company maintains its target of achieving corporate EBITDA break-even as a core near-term priority, alongside accelerating scalable franchise expansion and optimizing cost structures. - 2024/2025 vintage store performance: Newer 2024 and 2025 vintage stores (still ramping up for 2025) are expected to achieve similar unit economics and payback periods of 2-3 years, matching the strong performance of 2024 vintage stores.
Segment performance
1. Company-owned and operated stores: Total revenue for Q1 2026 declined year-over-year in line with the 14.6% total company revenue drop, driven by underperforming store closures and an overall 13.2% decline in system-wide same-store sales. Food and packaging costs as a percentage of company-owned store revenue fell 2.0 pp to 28.4% YoY. Other key cost categories as a percentage of company-owned revenue increased: rental/property management fees up 0.7 pp to 22.8%, payroll/employee benefits up 2.0 pp to 21.6%, delivery costs up 2.6 pp to 13.2%, and other operating expenses up 1.7 pp to 8.8%. Marketing expenses as a percentage of total company revenue fell 2.0 pp to 3.8% YoY. Adjusted corporate EBITDA margin was negative 11.8% in Q1 2026, compared to negative 9.8% YoY. 2024 vintage company-owned stores delivered a low-teens store contribution margin in Q1 2026, while 2024 and 2025 vintage compact make-to-order stores are targeted to hit payback within 2-3 years. Company-owned stores in tier 1 cities with over 10 store locations achieved over 10% and 7% contribution margin respectively, outperforming lower density markets. 2. Sub-franchise business: Other revenues (from franchise operations) increased 7.7% YoY in Q1 2026, with franchise profit growing 14% YoY. Special channel franchise stores (transportation hubs, hospitals, rest areas) delivered high-teens contribution margin in 2025, with an expected ~2 year payback period. Franchise contributes steady cash flow and profitability to the business.
Risks & headwinds
- The coffee industry in China is highly competitive, and new competition from lower-priced coffee offerings from established Chinese tea players has entered the market, creating additional pricing and market share pressure. - Delivery aggregators have significantly reduced subsidies, which contributed to the Q1 2026 same-store sales decline, creating ongoing pressure on consumer traffic and average ticket prices. - The company has faced short-term top-line pressure from the seasonal Q1 industry slowdown, underperforming store closures, and reduced marketing and discount spending, leading to a wider adjusted corporate EBITDA loss in Q1 2026 compared to 2025. - Early vintage larger-format stores have high rent as a percentage of revenue, weighing on overall company-owned store margin performance. - Forward-looking statements are inherently uncertain, and actual operational and financial results may differ materially from projected guidance due to unforeseen market and operational changes.
Analyst Q&A
Q: With same-store sales under pressure in Q1 2026 amid reduced delivery aggregator subsidies, what is management's outlook for same-store sales for the rest of 2026?
A: Management reports that same-store sales have already shown a strong recovering trend in recent weeks following the launch of new successful marketing campaigns. The company expects improved same-store sales performance in Q2 2026, and much stronger results for the remainder of the year.
Q: What are management's expectations for overall store contribution margin profiles moving forward, given the strong margins for newer 2024/2025 vintage and special channel stores?
A: Management expects overall store contribution margins to gradually improve from current levels. Same-store sales recovery will spread fixed labor and operating costs across higher revenue, reducing cost percentages. After pruning underperforming stores is completed this year, higher-margin newer vintage and special channel stores will make up a larger share of the store portfolio. Continued gross margin improvement from supply chain optimization, economies of scale, and higher-margin product launches will also support margin gains. Older large-format early stores carry high rent that weighs on margins, but newer stores have reasonable rents and already deliver strong store-level contribution margins.
Q: How will new entry of coffee offerings at low prices from existing Chinese tea players impact Teams China's business strategy?
A: Management notes that tea players have become more aggressive in entering the coffee segment with low pricing, but emphasizes that Teams China's differentiated business model mitigates this competition. Unlike pure-play coffee brands or tea companies entering coffee, Teams China operates a coffee plus fresh prepared food model that creates a unique competitive advantage, which management believes positions the company well for future growth despite new competition.