Tims China Announces Second Quarter 2026 Financial Results

Yahoo Finance · 2026-08-18

Tims China Announces Second Quarter 2026 Financial Results TH International Limited Tue, August 18, 2026 at 5:30 AM EDT 35 min read THCH SHANGHAI and NEW YORK, Aug. 18, 2026 (GLOBE NEWSWIRE) -- TH International Limited (Nasdaq: THCH), the parent company of the exclusive master franchisees of Tim Hortons coffee shops in China ("Tims China" or the "Company"), today announced its unaudited financial results for the second quarter 2026. Total revenues of RMB273.4 million (USD40.3 million), representing a 21.7% decrease from the same quarter of 2025. System sales 1 of RMB347.8 million (USD51.3 million), representing a 15.1% decrease from the same quarter of 2025. Net new store openings totaled two (a net opening of 15 made-to-order ("MTO") stores and a net closure of 13 non-MTO stores). Company owned and operated store contribution 2, previously reported as adjusted store EBITDA, was RMB12.6 million (USD1.9 million), compared to RMB27.2 million in the same quarter of 2025. Company owned and operated store contribution margin 3, previously reported as adjusted store EBITDA margin, was 5.7%, compared to 9.6% in the same quarter of 2025. Registered loyalty club members totaled 37.1 million as of June 30, 2026, representing a 41.7% year-over-year growth. 1 System sales is calculated as the gross merchandise value of sales generated from both company owned and operated stores and franchised stores. 2 Company owned and operated store contribution, is calculated as fully burdened gross profit4 of company owned and operated stores excluding depreciation & amortization. 3 Company owned and operated store contribution margin, is calculated as company owned and operated store contribution as a percentage of revenues from company owned and operated stores. 4 Fully burdened gross profit of company owned and operated stores, the most directly comparable GAAP measure to company owned and operated store contribution, was a loss of RMB7.2 million (USD1.1 million) for the three months ended June 30, 2026, compared to a gain of RMB0.4 million in the same quarter of 2025. Mr. Kwok Wah (John) Cheung, CEO of Tims China, stated, "The second quarter was a period of transition for Tims China. Our top-line results were impacted by our proactive decision to close underperforming stores, as well as pressure on same-store sales as we lapped strong delivery performance from last year. It is clear that we need to make meaningful changes to our strategy to win back customers. My experience tells me that when we focus on our core identity and consistently deliver great products and a great guest experience, our customers will respond. I have full confidence in Tims China's ability to improve the business and regain market share. We have a clear plan and are moving quickly to return the business to growth. We already see green shoots in the business when we look at our registered loyalty club membership, which reached more than 37.1 million as of June 30, 2026, up 41.7% year over year, providing a strong foundation to deepen customer engagement and support future growth". Mr. Dong (Albert) Li, CFO of Tims China, commented, "We successfully closed the initial tranche of US$15.8 million in additional senior secured convertible notes issued to Tim Hortons Restaurants International GmbH ("THRI"), our brand owner and founding shareholder, in July 2026. With the proceeds from this series of proposed financing, we plan to drive our innovation and product offerings, invest more in marketing activities, and deploy a more balanced store network development strategy by opening both company owned and operated stores and franchised stores going forward". Total revenues were RMB273.4 million (USD40.3 million) for the three months ended June 30, 2026, representing a decrease of 21.7% from RMB349.0 million in the same quarter of 2025. Total revenues comprise: Revenues from company owned and operated stores were RMB220.9 million (USD32.6 million) for the three months ended June 30, 2026, representing a decrease of 21.6% from RMB281.9 million in the same quarter of 2025. The decrease was primarily attributable to closures of certain underperforming stores as the number of company owned and operated stores decreased from 566 as of June 30, 2025 to 544 as of June 30, 2026, and a 17.3% decline in same-store sales growth for company owned and operated stores in the second quarter of 2026. The decrease was also attributable to a 0.9% year-over-year decrease in average ticket size, and a 20.7% year-over-year decrease in the number of orders from 10.5 million in the second quarter of 2025 to 8.3 million in the same quarter of 2026. Other revenues were RMB52.5 million (USD7.7 million) for the three months ended June 30, 2026, representing a decrease of 21.7% from RMB67.1 million in the same quarter of 2025. The decrease was primarily due to lower revenues generated per franchised store as a result of a decline in same-store sales growth for franchised stores, offset by an increase in the number of our franchised stores from 449 as of June 30, 2025 to 484 as of June 30, 2026. Company owned and operated store costs and expenses were RMB221.1 million (USD32.6 million) for the three months ended June 30, 2026, representing a decrease of 18.8% from RMB272.4 million in the same quarter of 2025. Company owned and operated store costs and expenses comprise: Food and packaging costs were RMB62.5 million (USD9.2 million) for the three months ended June 30, 2026, representing a decrease of 26.3% from RMB84.8 million in the same quarter of 2025, which was primarily due to a decrease in revenues from company owned and operated stores. As we continued to benefit from higher efficiencies in supply chains and cost reduction on raw materials, logistic and warehousing expenses, food and packaging costs as a percentage of revenues from company owned and operated stores decreased by 1.8 percentage points from 30.1% in the second quarter of 2025 to 28.3% in the same quarter of 2026. Rental and property management fees were RMB47.9 million (USD7.1 million) for the three months ended June 30, 2026, representing a decrease of 15.6% from RMB56.8 million in the same quarter of 2025, which was primarily due to a decrease in the number of our company-owned and operated stores from 566 as of June 30, 2025 to 544 as of June 30, 2026. Rental and property management fees as a percentage of revenues from company owned and operated stores increased by 1.5 percentage points from 20.2% in the second quarter of 2025 to 21.7% in the same quarter of 2026. Payroll and employee benefits expenses were RMB43.9 million (USD6.5 million) for the three months ended June 30, 2026, representing a decrease of 12.6% from RMB50.2 million in the same quarter of 2025, which was primarily due to a decrease in revenues from company owned and operated stores. Payroll and employee benefits expenses as a percentage of revenues from company owned and operated stores increased by 2.1 percentage points from 17.8% in the second quarter of 2025 to 19.9% in the same quarter of 2026. Delivery costs were RMB28.9 million (USD4.3 million) for the three months ended June 30, 2026, representing a decrease of 13.3% from RMB33.3 million in the same quarter of 2025, which was in line with the 11.9% decrease in delivery orders from 8.2 million in the second quarter of 2025 to 7.2 million in the same quarter of 2026, and a reduction in average delivery costs per order. Delivery costs as a percentage of revenues from company owned and operated stores increased by 1.3 percentage points to 13.1% in the second quarter of 2026, compared to 11.8% in the same quarter of 2025, which was primarily due to an increase in delivery revenue as a percentage of revenues from company owned and operated stores from 61.0% in the second quarter of 2025 to 65.7% in the same quarter of 2026. Other operating expenses were RMB17.4 million (USD2.6 million) for the three months ended June 30, 2026, representing a decrease of 14.7% from RMB20.4 million in the same quarter of 2025, which was primarily due to a decrease in revenues from company owned and operated stores. Other operating expenses as a percentage of revenues from company owned and operated stores increased by 0.7 percentage points to 7.9% in the second quarter of 2026, compared to 7.2% in the same quarter of 2025. Store depreciation and amortization expenses were RMB20.4 million (USD3.0 million) for the three months ended June 30, 2026, representing a decrease of 23.8% from RMB26.8 million in the same quarter of 2025, which was primarily due to impairment on property and equipment in relation to company owned and operated store closures and the reduced capital expenditures per store as a result of our initiatives to improve store unit economics. Store depreciation and amortization as a percentage of revenues from company owned and operated stores decreased by 0.3 percentage points to 9.2% in the second quarter of 2026, compared to 9.5% in the same quarter of 2025. Costs of other revenues were RMB36.8 million (USD5.4 million) for the three months ended June 30, 2026, representing a decrease of 20.9% from RMB46.5 million in the same quarter of 2025, which was in line with the revenue trend. Costs of other revenues as a percentage of other revenues increased by 0.8 percentage points from 69.3% in the second quarter of 2025 to 70.1% in the same quarter of 2026 due to lower margin generated from franchised business during the second quarter of 2026. Marketing expenses were RMB13.3 million (USD2.0 million) for the three months ended June 30, 2026, representing a decrease of 4.4% from RMB13.9 million in the same quarter of 2025. Marketing expenses as a percentage of total revenues increased by 0.9 percentage points from 4.0% in the second quarter of 2025 to 4.9% in the same quarter of 2026 as we spent more marketing efforts to support our franchised business during the second quarter of 2026. General and administrative expenses were RMB42.3 million (USD6.2 million) for the three months ended June 30, 2026, representing an increase of 12.1% from RMB37.7 million in the same quarter of 2025, which was primarily due to a RMB4.2 million (USD0.6 million) increase in professional and other service fees. As a result of the foregoing, adjusted general and administrative expenses , which excludes: (i) share-based compensation expenses of RMB0.3 million (USD0.05 million), and (ii) impairment losses of rental deposits of RMB2.3 million (USD0.3 million), were RMB39.6 million (USD5.8 million), representing an increase of 14.4% from RMB34.6 million in the same quarter of 2025. Adjusted general and administrative expenses as a percentage of total revenues increased by 4.6 percentage points from 9.9% in the second quarter of 2025 to 14.5% in the same quarter of 2026. For more information on the Company's non-GAAP financial measures, please see "Use of Non-GAAP Financial Measures" and "Reconciliation of Non-GAAP Measures to the Most Directly Comparable GAAP Measures" set forth at the end of this earnings release. Franchise and royalty expenses were RMB14.4 million (USD2.1 million) for the three months ended June 30, 2026, representing a decrease of 15.9% from RMB17.1 million in the same quarter of 2025, which was primarily due to a decrease in total revenues. Franchise and royalty expenses as a percentage of total revenues increased by 0.4 percentage points, from 4.9% in the second quarter of 2025 to 5.3% in the same quarter of 2026, as a result of higher royalty rate applicable. Impairment losses of long-lived assets were RMB4.6 million (USD0.7 million) for the three months ended June 30, 2026, compared to RMB9.5 million in the same quarter of 2025, which was primarily due to a decrease in the number of planned closures of underperforming company owned and operated stores in the second quarter of 2026. As a result of the foregoing, operating loss was RMB58.1 million (USD8.6 million) for the three months ended June 30, 2026, compared to RMB47.8 million in the same quarter of 2025. Adjusted Corporate EBITDA was a loss of RMB21.0 million (USD3.1 million) for the three months ended June 30, 2026, compared to a gain of RMB2.2 million in the same quarter of 2025. Adjusted Corporate EBITDA margin was negative 7.6% in the second quarter of 2026, compared to positive 0.6% in the same quarter of 2025. Changes in fair value of convertible notes were a loss of RMB34.9 million (USD5.1 million) for the three months ended June 30, 2026, compared to a loss of RMB23.4 million in the same quarter of 2025. Net loss was RMB97.4 million (USD14.4 million) for the three months ended June 30, 2026, compared to RMB75.9 million for the same quarter of 2025. Adjusted net loss , which excludes: (i) share-based compensation expenses of RMB0.3 million (USD0.05 million); (ii) impairment losses of long-lived assets of RMB4.6 million (USD0.7 million), (iii) impairment losses of rental deposits of RMB2.3 million (USD0.3 million), (iv) loss on disposal of property and equipment of RMB0.5 million (USD0.1 million), and (v) loss from changes in fair value of convertible notes of RMB34.9 million (USD5.1 million), was RMB54.9 million (USD8.1 million) for the three months ended June 30, 2026, compared to RMB39.7 million for the same quarter of 2025. Adjusted net loss margin was negative 20.0% in the second quarter of 2026, compared to negative 11.4% in the same quarter of 2025. Basic and diluted loss per ordinary share was RMB3.00 (USD0.44) in the second quarter of 2026, compared to RMB2.32 in the same quarter of 2025. Adjusted basic and diluted net loss per ordinary share was RMB1.69 (USD0.25) in the second quarter of 2026, compared to RMB1.21 in the same quarter of 2025. As of June 30, 2026, the total amount of the Company's cash and cash equivalents and restricted cash was RMB121.1 million (USD17.8 million), compared to RMB129.7 million as of December 31, 2025. The change was primarily attributable to cash disbursements on business operations, partially offset by the draw-down of additional bank borrowings. Same-store sales growth for system-wide stores Same-store sales growth for company owned and operated stores Registered loyalty club members (in thousands) Company owned and operated store contribution (Renminbi in thousands) Company owned and operated store contribution margin Same-store sales growth. The percentage change in the sales of stores that have been operating for 12 months or longer during a certain period compared to the same period from the prior year. The same-store sales growth for any period of more than a month equals the arithmetic average of the same-store sales growth of each month covered in the period. If a store was closed for seven days or more during any given month, its sales during that month and the same month in the comparison period are excluded for purposes of measuring same-store sales growth. Net new store openings. The gross number of new stores opened during the period minus the number of stores permanently closed during the period. System sales. Gross merchandise value of sales generated from both company owned and operated stores and franchised stores. Company owned and operated store contribution (previously reported as adjusted store EBITDA). Calculated as fully burdened gross profit of company owned and operated stores excluding depreciation and amortization. Company owned and operated store contribution margin (previously reported as adjusted store EBITDA margin). Calculated as company owned and operated store contribution as a percentage of revenues from company owned and operated stores. Adjusted general and administrative expenses. Calculated as general and administrative expenses excluding share-based compensation expenses, professional fees related to financing programs, and impairment losses of rental deposits. Adjusted corporate EBITDA. Calculated as operating loss excluding certain non-cash expenses consisting of depreciation and amortization, share-based compensation expenses, impairment losses of long-lived assets, loss on disposal of property and equipment, professional fees related to financing programs , and impairment losses of rental deposits . Adjusted corporate EBITDA margin. Calculated as adjusted corporate EBITDA as a percentage of total revenues. Adjusted net loss. Calculated as net loss excluding share-based compensation expenses, impairment losses of long-lived assets, loss on disposal of property and equipment, professional fees related to financing programs, impairment losses of rental deposits, and changes in fair value of convertible notes. Adjusted net loss margin. Calculated as adjusted net loss as a percentage of total revenues. Adjusted basic and diluted net loss per ordinary share. Calculated as adjusted net loss attributable to the Company's ordinary shareholders divided by weighted-average number of basic and diluted ordinary shares. On August 13, 2026, Tims China announced the official launch of a joint membership campaign with China Southern Airlines. The two companies will work together on member benefits integration, consumer touchpoint fusion, and service experience innovation, giving members of both programs a new "coffee plus travel" lifestyle experience and expanding the membership service ecosystem.

AI 시장 분석

According to the Q2 2026 earnings reported by Tims China, total revenue dropped 21.7% year-over-year to 273.4 million RMB. System revenue also declined by 15.1% to 347.8 million RMB, indicating an overall sluggish performance. Investors should remain cautious about the lackluster revenue growth and short-term profitability pressure stemming from store restructuring.

상승 영향

Consumer Goods — Registered loyalty club members increased by 41.7% year-over-year to 37.1 million, laying the groundwork for future customer engagement and a revenue rebound.

하락 영향

Consumer Goods — Q2 2026 total revenue decreased by 21.7% year-over-year to 273.4 million RMB and the company-owned store contribution margin fell to 5.7%, deteriorating profitability.

DYAX 전담 분석

The Q2 2026 total revenue decrease of 21.7% to 273.4 million RMB and the drop in company-owned store contribution margin to 5.7% intuitively demonstrate deteriorating profitability. With the compounding effects of closing underperforming stores and suppression factors on same-store sales, downward pressure on the stock price is mounting in the near term.

Going forward, the key watching point for the stock is whether the growth in loyal customers actually translates into a revenue rebound. Investors must monitor key indicators to see whether securing funds through additional convertible bond issuances will lead to new product innovation and strengthened marketing to achieve a turnaround, or if the continuous sluggish performance will drive a prolonged weakness.

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