Tims China Announces Second Quarter 2025 Financial Results

Executive Summary

• TH International Limited (Tims China) reported unaudited financial results for the second quarter ended June 30, 2025, showing a return to positive adjusted corporate EBITDA despite a decline in total revenues.
• System sales increased 1.4% year-over-year to RMB409.5 million, driven by a successful "Coffee + Freshly Prepared Food" strategy, while total revenues decreased 4.9% to RMB349.0 million due to store closures and lower same-store sales in company-owned locations.
• The company achieved a net loss of RMB75.9 million (USD10.6 million) for the quarter, an improvement from the RMB99.5 million loss in the same period last year, with adjusted net loss narrowing to RMB39.7 million.

Key Details

• Total Revenues: RMB349.0 million (USD48.7 million), a 4.9% decrease from RMB366.8 million in Q2 2024.
• System Sales: RMB409.5 million (USD57.2 million), a 1.4% increase year-over-year.
• Store Performance:
  • Net new store closures totaled 9 stores (40 net MTO openings vs. 49 non-MTO closures, including 41 Tims Express stores).
  • Total stores decreased to 1,015 as of June 30, 2025 (from 1,024 at year-end 2024).
  • Company-owned and operated stores: 566.
  • Franchised stores: 449 (increased from 333 in Q2 2024).
  • Same-store sales growth for company-owned stores: -3.6% (improved from -6.5% in Q1 2025).
• Profitability Metrics:
  • Adjusted Corporate EBITDA: Positive RMB2.2 million (USD0.3 million), compared to RMB3.3 million in Q2 2024.
  • Company Owned and Operated Store Contribution: RMB27.2 million (USD3.8 million), down from RMB32.4 million in Q2 2024.
  • Store Contribution Margin: 9.6%, down from 10.1% in Q2 2024.
  • Net Loss: RMB75.9 million (USD10.6 million), compared to RMB99.5 million in Q2 2024.
  • Adjusted Net Loss: RMB39.7 million (USD5.5 million), compared to RMB47.4 million in Q2 2024.
  • Basic and Diluted Net Loss Per Share: RMB2.32 (USD0.32), compared to RMB1.45 in Q2 2024.
  • Adjusted Basic and Diluted Net Loss Per Share: RMB1.21 (USD0.17), compared to RMB1.50 in Q2 2024.
• Revenue Breakdown:
  • Company Owned and Operated Store Revenues: RMB281.9 million (USD39.3 million), a 12.5% decrease, driven by store closures, a 3.6% drop in same-store sales, a 3.2% decline in order volume (10.8M to 10.5M), and a 6.9% decrease in average ticket size.
  • Other Revenues: RMB67.1 million (USD9.4 million), a 50.7% increase, primarily due to franchise business expansion.
• Cost Structure (Company Owned and Operated Stores):
  • Food and Packaging Costs: RMB84.8 million (USD11.8 million), a 15.0% decrease; margin improved to 30.1% from 30.9%.
  • Rental and Property Management Fees: RMB56.8 million (USD7.9 million), an 8.6% decrease; margin increased to 20.2% from 19.3% due to lower sales base.
  • Payroll and Employee Benefits: RMB50.2 million (USD7.0 million), a 17.4% decrease; margin improved to 17.8% from 18.9%.
  • Delivery Costs: RMB33.3 million (USD4.7 million), a 3.4% increase; margin increased to 11.8% from 10.0% due to higher delivery revenue mix.
  • Other Operating Expenses: RMB20.4 million (USD2.9 million), a 16.3% decrease; margin improved to 7.2% from 7.6%.
  • Store Depreciation and Amortization: RMB26.8 million (USD3.7 million), a 12.2% decrease.
• Corporate Expenses:
  • Marketing Expenses: RMB13.9 million (USD1.9 million), an 8.4% increase, driven by promotion of the "Light & Fit Lunch Box."
  • General and Administrative Expenses: RMB37.7 million (USD5.3 million), a 5.2% decrease. Adjusted G&A was RMB34.6 million (USD4.8 million), a 13.7% increase due to higher employee compensation.
  • Franchise and Royalty Expenses: RMB17.1 million (USD2.4 million), a 14.2% increase.
  • Impairment Losses of Long-Lived Assets: RMB9.5 million (USD1.3 million), up from RMB5.8 million in Q2 2024.
• Liquidity:
  • Total cash, restricted cash, and time deposits were RMB178.8 million (USD25.0 million) as of June 30, 2025, down from RMB184.2 million at December 31, 2024.
• Strategic Updates:
  • Launched "Light & Fit Lunch Box" platform to drive top-line growth.
  • Food revenue increased 8.6% year-over-year; food revenue contribution reached a historical high of 35.2% of system sales.
  • Appointed singer-songwriter Lars Huang as brand ambassador on July 15, 2025.
  • Loyalty club members reached 26.2 million as of June 30, 2025, a 22.4% year-over-year growth.

Notable Quotes

• Mr. Yongchen Lu, CEO & Director: “In Q2, we reinforced our differentiated 'Coffee + Freshly Prepared Food' strategy with the successful launch of 'Light & Fit Lunch Box' platform... We returned to top-line growth during the quarter, achieving a 1.4% year-over-year increase in system sales... At the same time, we returned to positive adjusted corporate EBITDA and reduced adjusted net losses by 16.2% during the quarter.”
• Mr. Dong (Albert) Li, CFO: “We continued to demonstrate our ability to further improve our financial performance by refining store unit economics and driving operational efficiencies across both store and corporate levels... In Q2, our food and packaging costs, labor costs, and other operating expenses (as a percentage of revenues from company owned and operated stores) decreased by 0.8, 1.0 and 0.4 percentage points year-over-year, respectively.”