TH International Limited

In Q2 2026, total revenues were RMB 273.4 million, down 21.7% year over year, and system sales were RMB 347.8 million, down 15.1%. Same-store sales growth was negative 17.8%, with comparable transactions down 16.3% and average comparable ticket size down 1.5%. Company-owned and operated store contribution margin was 5.7% versus 9.6% a year ago, and adjusted corporate EBITDA margin was negative 7.6% versus positive 0.6% in Q2 2025. Cash and cash equivalents plus restricted cash were RMB 121.1 million as of June 30, 2026, versus RMB 129.7 million at year-end 2025. Looking ahead, management did not give a numeric revenue or EBITDA forecast, but said near-term priorities are sustainable revenue growth, improved store-level profitability, tighter corporate marketing and G&A, and corporate EBITDA breakeven.

John Cheung said the quarter was a “period of transition” and called the results disappointing, citing loss of share to competition and the impact of store closures plus a tough delivery comparison. His strategy centers on getting back to fundamentals: stronger product innovation, better coffee and bakery offerings, better value, improved service, and a more disciplined store network focused on top-tier cities and high-traffic channels. He was optimistic about the brand’s underlying strength but stressed that change is needed to win customers back more often.

Albert Li highlighted that weaker demand and store closures pressured revenue, while cost actions helped partly offset the decline. He pointed to food and packaging cost in company-owned stores improving to 28.3% of revenue from 30.1% a year ago, rent and property management fees falling to RMB 47.9 million from RMB 56.8 million, and payroll and benefits dropping to RMB 43.9 million from RMB 50.2 million. He also noted delivery orders declined to 7.2 million from 8.2 million, digital orders rose to 91.8% of total orders, and registered loyalty members grew to more than 37.1 million. On liquidity, he said cash was RMB 121.1 million and the company closed the initial tranche of USD 15.8 million from the USD 55 million financing, which will support innovation, marketing, and a more balanced store rollout.

Analysts focused on how management plans to restore profitability, how long the turnaround may take, and whether store growth will shift toward franchises. Cheung said he could not give a timeline, but emphasized three priorities: better innovation, improved store economics, and stronger capabilities in operations and new store development. On store openings, he did not provide a specific number for 2H 2026 or 2027, but said the company will expand with discipline and aims for a roughly equal contribution from company-owned and franchised stores. Management also said marketing spend will increase in the second half, especially starting in September, to support traffic recovery and broader customer acquisition.