Chagee Holdings Limited American Depositary Shares

Second-quarter net revenue was RMB 3,414.6 million, up 2.5% year over year and down 3.7% quarter over quarter. GAAP net income was RMB 464.8 million, with a net margin of 13.6%, versus 2.3% in the same period last year; non-GAAP net income was RMB 488.7 million with a 14.3% margin. Gross profit was RMB 1,843.4 million, and gross margin was 54%, flat year over year. Operating income was RMB 524.7 million, with operating margin of 15.4% versus 3.2% a year ago; non-GAAP operating income was RMB 548.6 million with a 16.1% margin. Total GMV was RMB 7,660 million to RMB 7,663 million depending on the section of the call, down 3.3% sequentially; Greater China GMV was RMB 7,156 million and overseas GMV was RMB 504.0 million, up 114.3% year over year. The teahouse network ended the quarter at 7,639 locations, up 8.5% year over year. Cash, cash equivalents, restricted cash, and time deposits totaled RMB 6,795.5 million. No formal quarterly or full-year financial guidance was provided; management instead said 2026 is a year of adjustment and stabilization, and that July same-store sales were down low-single-digits while August is expected to turn positive year over year.

Junjie Zhang framed the quarter as part of a broader reset toward high-quality growth and stronger fundamentals in a more competitive market. He emphasized product, marketing, organizational efficiency, consumer operations, and overseas expansion as the company’s four strategic priorities, and said the goal is not rapid scale expansion but building a stronger foundation for the next stage. He also highlighted the USD 150 million share repurchase program, noting about USD 30 million had been executed by August 24, as evidence of confidence in long-term value.

Aaron Huang said the quarter reflected a softer macro backdrop and tougher competition, but stressed that operating discipline and profitability remained intact. He pointed to gross margin of 54%, operating income of RMB 524.7 million, non-GAAP operating margin of 16.1%, and 14 consecutive quarters of positive net income. He also cited cost efficiency gains, including sales and marketing expense ratio at 8.8% and G&A ratio at 9.1% on a non-GAAP basis, alongside cash and equivalents, restricted cash, and time deposits of RMB 6,795.5 million. On capital allocation, he said the company paid a USD 177 million special dividend last year, is reviewing more regular shareholder-return options such as dividends, and remains mindful of teahouse development funding needs.

In Q&A, management was asked about the second-half outlook, same-store sales trends, and payout plans. Zhang said the company views 2026 as a year of adjustment and stabilization, with the second half focused on executing lessons from the first half and staying focused on fundamentals rather than rapid expansion. Yin said July same-store sales showed a low-single-digit decline but were a meaningful improvement from the first half, and management expects August to turn positive year over year, helped by new products, summer-friendly offerings like gelato and specialty deals, and better service execution. Huang said the board and management are actively reviewing a more regular and sustainable shareholder-return mechanism, including regular dividends, but no specific proposal has been announced.