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.
SECOND QUARTER 2026 HIGHLIGHTS
-- Total revenues of RMB273.4 million (USD40.3 million), representing
a 21.7% decrease from the same quarter of 2025.
-- System sales1 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 contribution2, 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 margin3, 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 profit(4) 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.
COMPANY MANAGEMENT STATEMENT
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".
SECOND QUARTER 2026 FINANCIAL RESULTS
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.
KEY OPERATING DATA
Tims only For the three months ended or as of
----------------------------------------------------------
Jun 30, Sep 30, Dec 31, Mar 31, June 30,
Exclude the
discontinued
business) 2025 2025 2025 2026 2026
---------- ---------- ---------- ---------- ----------
Total stores 1,015 1,030 1,047 1,026 1,028
Company owned
and operated
stores 566 551 562 541 544
Franchised
stores 449 479 485 485 484
Made to order
(MTO) stores 692 730 770 765 780
Non-MTO stores 323 300 277 261 248
Same-store sales
growth for
system-wide
stores -4.8% 1.3% -2.4% -13.2% -17.8%
Same-store sales
growth for
company owned
and operated
stores -3.6% 3.3% -1.4% -12.4% -17.3%
Registered
loyalty club
members (in
thousands) 26,192 27,900 31,021 35,930 37,118
Company owned
and operated
store
contribution
(Renminbi in
thousands) 27,176 21,786 9,164 3,730 12,584
Company owned
and operated
store
contribution
margin 9.6% 7.7% 3.7% 1.8% 5.7%
KEY DEFINITIONS
-- 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.
RECENT BUSINESS DEVELOPMENT
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.
USE OF NON-GAAP FINANCIAL MEASURES
The Company uses non-GAAP financial measures, namely company owned and operated store contribution, company owned and operated store contribution margin, adjusted general and administrative expenses, adjusted corporate EBITDA, adjusted corporate EBITDA margin, adjusted net loss, adjusted net loss margin, and adjusted basic and diluted net loss per ordinary share in evaluating its operating results and for financial and operational decision-making purposes. The Company defines (i) company owned and operated store contribution as fully burdened gross profit of company owned and operated stores excluding depreciation and amortization; (ii) company owned and operated store contribution margin as company owned and operated store contribution as a percentage of revenues from company owned and operated stores; (iii) adjusted general and administrative expenses as general and administrative expenses excluding share-based compensation expenses, professional fees related to financing programs, and impairment losses of rental deposits; (iv) adjusted corporate EBITDA 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; (v) adjusted corporate EBITDA margin as adjusted corporate EBITDA as a percentage of total revenues; (vi) adjusted net loss 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; (vii) adjusted net loss margin as adjusted net loss as a percentage of total revenues; and (viii) adjusted basic and diluted net loss per ordinary share as adjusted net loss attributable to the Company's ordinary shareholders divided by weighted-average number of basic and diluted ordinary shares. The Company believes company owned and operated store contribution, company owned and operated store contribution margin, adjusted general and administrative expenses, adjusted corporate EBITDA, adjusted corporate EBITDA margin, adjusted net loss, adjusted net loss margin, and adjusted basic and diluted net loss per ordinary share enhance investors' overall understanding of its financial performance and allow for greater visibility with respect to key metrics used by its management in its financial and operational decision-making.
These non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. As these non-GAAP financial measures have limitations as analytical tools and may not be calculated in the same manner by all companies, they may not be comparable to other similarly titled measures used by other companies. The Company compensates for these limitations by reconciling the non-GAAP financial measures to the nearest U.S. GAAP performance measures, which should be considered when evaluating the Company's performance. For reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures, please see the section of the accompanying tables titled, "Reconciliation of Non-GAAP Measures to the Most Directly Comparable GAAP Measures." The Company encourages investors and others to review its financial information in its entirety and not rely on any single financial measure.
EXCHANGE RATE INFORMATION
This earnings release contains translations of certain RMB amounts into U.S. dollars ("USD") at specified rates solely for the convenience of the reader. Unless otherwise stated, all translations from RMB to USD were made at the rate of RMB6.7851 to USD1.00, the exchange rate in effect on June 30, 2026 set forth in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB or USD amounts referred could be converted into USD or RMB, as the case may be, at any rate or at all.
CONFERENCE CALL
The Company will hold a conference call today, on Tuesday, August 18, 2026, at 8:00 am Eastern Time (on Tuesday, August 18, 2026, at 8:00 pm Beijing Time) to discuss the financial results.
Participants are strongly encouraged to pre-register for the conference call, by using the weblink provided below.
https://register-conf.media-server.com/register/BIe1051e377efc4328b00acdcfb0146d50
Participants may also view the live webcast by registering through below weblink:
https://edge.media-server.com/mmc/p/y7354vo8
The webcast features a 'Submit Your Question' tab at the top, where you will have the opportunity to submit your questions before and during the call.
A live and archived webcast of the conference call will also be available at the Company's Investor Relations website at https://ir.timschina.com under "Events and Presentations".
FORWARD-LOOKING STATEMENTS
Certain statements in this earnings release may be considered forward-looking statements within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995, such as the Company's ability to further grow its business and store network, optimize its cost structure, improve its operational efficiency, and achieve profitable growth. Forward-looking statements are statements that are not historical facts and generally relate to future events or the Company's future financial or other performance metrics. In some cases, you can identify forward-looking statements by terminology such as "believe," "may," "will," "potentially," "estimate," "continue," "anticipate," "intend," "could," "would," "project," "target, " "plan," "expect," or the negatives of these terms or variations of them or similar terminology. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ materially from those expressed or implied by such forward looking statements. New risks and uncertainties may emerge from time to time, and it is not possible to predict all risks and uncertainties. These forward-looking statements are based upon estimates and assumptions that, while considered reasonable by the Company and its management, as the case may be, are inherently uncertain and subject to material change. Factors that may cause actual results to differ materially from current expectations include various factors beyond management's control, including, but not limited to, general economic conditions and other risks, uncertainties and factors set forth in the sections entitled "Risk Factors" and "Cautionary Statement Regarding Forward-Looking Statements" in the Company's Annual Report on Form 20-F, and other filings it makes with the Securities and Exchange Commission. Nothing in this communication should be regarded as a representation by any person that the forward-looking statements set forth herein will be achieved or that any of the contemplated results of such forward-looking statements will be achieved. You should not place undue reliance on forward-looking statements in this communication, which speak only as of the date they are made and are qualified in their entirety by reference to the cautionary statements herein. Except as required by law, the Company expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's expectations with respect thereto or any change in events, conditions, or circumstances on which any statement is based.
ABOUT TH INTERNATIONAL LIMITED
TH International Limited (Nasdaq: THCH) ("Tims China") is the parent company of the exclusive master franchisees of Tim Hortons coffee shops in mainland China, Hong Kong and Macau.
The Company's philosophy is rooted in world-class execution and data-driven decision making and centered around true local relevance, continuous innovation, genuine community, and absolute convenience. For more information, please visit https://www.timschina.com.
IMPORTANT NOTICE REGARDING THE TIM HORTONS$(R)$ BRAND
The TIM HORTONS(R) brand and related trademarks are used by Tims China pursuant to a franchise agreement with Tim Hortons Restaurants International GmbH and its affiliates (collectively, the "Identified Persons"). The Identified Persons are entities entirely separate and distinct from Tims China and its subsidiaries (the "Group"). No Identified Person exercises any control over the business, operations, finances or management of the Group, and no Identified Person is responsible for any obligations or liabilities of the Group.
INVESTOR AND MEDIA CONTACTS
Investor Relations
IR@timschina.com
Public and Media Relations
Patty Yu
Patty.Yu@timschina.com
TH INTERNATIONAL LIMITED AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands of RMB and US$, except for number
of shares)
As of
-------------------------------------------
December 31, 2025 June 30, 2026
----------------- ------------------------
RMB RMB US$
ASSETS
Current assets:
Cash and cash
equivalents 121,795 107,833 15,892
Restricted Cash 7,916 13,222 1,949
Amount due from
related parties 195 - -
Accounts receivable,
net 17,692 12,212 1,800
Inventories 36,793 32,938 4,854
Prepaid expenses and
other current
assets 142,235 128,813 18,985
Total current assets 326,626 295,018 43,480
================ ========== ========
Non-current assets:
Property and
equipment, net 332,070 287,164 42,323
Intangible assets,
net 81,014 72,768 10,725
Operating lease
right-of-use assets 348,916 268,491 39,571
Other non-current
assets 88,051 104,193 15,356
Total non-current
assets 850,051 732,616 107,975
Total assets 1,176,677 1,027,634 151,455
================ ========== ========
LIABILITIES AND
SHAREHOLDERS'EQUITY
Current liabilities:
Bank borrowings,
current 395,088 448,377 66,083
Accounts payable 199,152 180,897 26,661
Contract liabilities 37,197 33,229 4,897
Amount due to related
parties 17,414 53,035 7,816
Operating lease
liabilities 180,806 169,239 24,943
Other current
liabilities 172,605 174,358 25,697
Total current
liabilities 1,002,262 1,059,135 156,097
---------------- ---------- --------
Non-current
liabilities:
Convertible notes, at
fair value 1,152,723 1,183,734 174,461
Contract liabilities 10,133 8,373 1,234
Operating lease
liabilities 240,282 175,901 25,925
Other non-current
liabilities 7,712 7,152 1,054
Total non-current
liabilities 1,410,850 1,375,160 202,674
---------------- ---------- --------
Total liabilities 2,413,112 2,434,295 358,771
---------------- ---------- --------
Shareholders' equity:
Ordinary shares 10 10 1
Additional paid-in
capital 1,821,605 1,823,869 268,805
Accumulated losses (3,102,994) (3,310,359) (487,887)
Accumulated other
comprehensive
income 38,393 72,619 10,704
Treasury shares - - -
Total deficit
attributable to
shareholders of the
Company (1,242,986) (1,413,861) (208,377)
Non-controlling
interests 6,551 7,200 1,061
Total shareholders'
deficit (1,236,435) (1,406,661) (207,316)
---------------- ---------- --------
Commitments and
Contingencies - - -
Total liabilities and
shareholders'
deficit 1,176,677 1,027,634 151,455
================ ========== ========
TH INTERNATIONAL LIMITED AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME/(LOSS)
(Amounts in thousands of RMB and US$, except for per
share data)
For the three months ended
June 30, For the six months ended June 30
---------------------------- --------------------------------
2025 2026 2025 2026
-------- ------------------ --------- ---------------------
RMB RMB US$ RMB RMB US$
-------- -------- -------- --------- --------- ----------
Revenues:
Company owned and
operated stores 281,872 220,855 32,550 536,631 428,071 63,090
Other revenues 67,104 52,522 7,741 113,087 102,047 15,040
Total revenues 348,976 273,377 40,291 649,718 530,118 78,130
Costs and expenses,
net:
Company owned and
operated stores
Food and packaging 84,807 62,495 9,211 162,279 121,427 17,896
Rental and property
management fee 56,824 47,943 7,066 113,119 95,142 14,022
Payroll and employee
benefits 50,227 43,882 6,467 100,247 88,700 13,073
Delivery costs 33,338 28,912 4,262 60,379 56,235 8,287
Other operating
expenses 20,424 17,425 2,568 38,442 35,605 5,248
Store depreciation
and amortization 26,789 20,406 3,007 55,147 41,992 6,189
Company owned and
operated store costs
and expenses 272,409 221,063 32,581 529,613 439,101 64,715
Costs of other
revenues 46,502 36,804 5,424 78,028 69,852 10,295
Marketing expenses 13,906 13,295 1,959 31,335 23,104 3,405
General and
administrative
expenses 37,698 42,261 6,229 89,508 90,305 13,311
Franchise and royalty
expenses 17,089 14,366 2,117 30,985 27,901 4,112
Other operating costs
and expenses 98 616 91 1,213 1,175 173
Loss on disposal of
property and
equipment 247 502 74 2,980 1,114 164
Impairment losses of
long-lived assets 9,485 4,563 673 21,103 10,450 1,540
Other income 679 1,986 293 1,965 2,502 369
Total costs and
expenses, net 396,755 331,484 48,855 782,800 660,500 97,346
------- ------- ------- -------- -------- -------
Operating loss (47,779) (58,107) (8,564) (133,082) (130,382) (19,216)
Interest income 983 1,145 169 1,083 1,545 228
Interest expenses (4,831) (4,285) (632) (8,407) (8,239) (1,214)
Foreign currency
transaction loss (431) (1,337) (197) (51) (2,181) (322)
Changes in fair value
of convertible
notes (23,383) (34,857) (5,137) 6,075 (67,459) (9,942)
Loss before income
taxes (75,441) (97,441) (14,361) (134,382) (206,716) (30,466)
Income tax expenses (484) - - (484) - -
Net loss (75,925) (97,441) (14,361) (134,866) (206,716) (30,466)
======= ======= ======= ======== ======== =======
Less: Net
(loss)/income
attributable to
non-controlling
interests (470) 28 4 (1,390) 649 96
Net loss attributable
to shareholders of
the Company (75,455) (97,469) (14,365) (133,476) (207,365) (30,562)
Basic and diluted
loss per Ordinary
Share (2.32) (3.00) (0.44) (4.10) (6.38) (0.94)
======= ======= ======= ======== ======== =======
Net loss (75,925) (97,441) (14,361) (134,866) (206,716) (30,466)
Other comprehensive
income/(loss)
Fair value changes of
convertible notes
due to
instrument-specific
credit risk, net of
nil income taxes (286) - - 144 - -
Foreign currency
translation
adjustment, net of
nil income taxes 2,360 16,156 2,381 3,177 34,226 5,044
Total comprehensive
loss (73,851) (81,285) (11,980) (131,545) (172,490) (25,422)
Less: Comprehensive
(loss)/income
attributable to
non-controlling
interests (470) 28 4 (1,390) 649 96
Comprehensive loss
attributable to
shareholders of the
Company (73,381) (81,313) (11,984) (130,155) (173,139) (25,518)
------- ------- ------- -------- -------- -------
TH INTERNATIONAL LIMITED AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS
(Amounts in thousands of RMB and US$)
For the three months ended For the six months ended June
June 30, 30,
2025 2026 2025 2026
RMB RMB US$ RMB RMB US$
Net cash (used
in)/provided by
operating
activities (1,175) 33,968 5,006 (1,394) 10,424 1,536
Net cash used in
investing
activities (36,715) (9,169) (1,351) (53,373) (20,641) (3,042)
Net cash (used
in)/provided by
financing
activities 5,900 (13,788) (2,032) 50,113 4,633 683
Effect of foreign
currency exchange
rate changes on
cash (688) (1,363) (201) (825) (3,072) (453)
Net
increase/(decrease)
in cash (32,678) 9,648 1,422 (5,479) (8,656) (1,276)
Cash and cash
equivalents and
restricted cash, at
beginning of the
period 211,436 111,407 16,419 184,237 129,711 19,117
Cash and cash
equivalents and
restricted cash, at
end of the period 178,758 121,055 17,841 178,758 121,055 17,841
======= ======= ====== ======= ======= ======
TH INTERNATIONAL LIMITED AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP MEASURES TO THE MOST DIRECTLY
COMPARABLE GAAP MEASURES
(Unaudited, amounts in thousands of RMB and US$, except
for number of shares and per share data)
A. Company
owned and
operated store
contribution
For the three months ended June 30, For the six months ended June 30
2025 2026 2025 2026
% of % of % of
Revenues - Revenues - Revenues -
company company company
owned and owned and owned and % of Revenues -
operated operated operated company owned and
RMB stores RMB US$ stores RMB stores RMB US$ operated stores
Revenues -
company owned
and operated
stores 281,872 100.0 220,855 32,550 100.0 536,631 100.0 428,071 63,090 100.0
Food and
packaging costs
- company owned
and operated
stores (84,807) (30.1) (62,495) (9,211) (28.3) (162,279) (30.2) (121,427) (17,896) (28.4)
Rental expenses
- company owned
and operated
stores (56,824) (20.2) (47,943) (7,066) (21.7) (113,119) (21.1) (95,142) (14,022) (22.2)
Payroll and
employee
benefits -
company owned
and operated
stores (50,227) (17.8) (43,882) (6,467) (19.9) (100,247) (18.7) (88,700) (13,073) (20.7)
Delivery costs -
company owned
and operated
stores (33,338) (11.8) (28,912) (4,262) (13.1) (60,379) (11.3) (56,235) (8,287) (13.1)
Other operating
expenses -
company owned
and operated
stores (20,424) (7.2) (17,425) (2,568) (7.9) (38,442) (7.2) (35,605) (5,248) (8.3)
Store
depreciation
and
amortization (26,789) (9.5) (20,406) (3,007) (9.2) (55,147) (10.3) (41,992) (6,189) (9.8)
Franchise and
royalty
expenses -
company owned
and operated
stores (9,076) (3.3) (7,614) (1,122) (3.4) (17,835) (3.2) (14,648) (2,159) (3.5)
Fully-burdened
gross (loss)
profit -
company owned
and operated
stores 387 0.1 (7,822) (1,153) (3.5) (10,817) (2.0) (25,678) (3,784) (6.0)
Store
depreciation
and
amortization 26,789 9.5 20,406 3,007 9.2 55,147 10.3 41,992 6,189 9.8
Company owned
and operated
store
contribution 27,176 9.6 12,584 1,854 5.7 44,330 8.3 16,314 2,405 3.8
Company owned
and operated
store
contribution
margin 9.6% 9.6% 5.7% 5.7% 5.7% 8.3% 8.3% 3.8% 3.8% 3.8%
B. Adjusted
general and
administrative
expenses
For the three months ended June 30, For the six months ended June 30
2025 2026 2025 2026
% of Total % of Total % of Total
RMB Revenues RMB US$ Revenues RMB Revenues RMB US$ % of Total Revenues
General and
administrative
expenses (37,698) (10.8) (42,261) (6,229) (15.5) (89,508) (13.9) (90,305) (13,311) (17.0)
Adjusted for:
Share-based
compensation
expenses 749 0.2 320 47 0.1 1,825 0.3 1,836 271 0.3
Professional
fees related to
financing
programs - - - - - 1,007 0.2 - - -
Impairment
losses of
rental
deposits 2,335 0.7 2,347 346 0.9 4,896 0.8 5,440 802 1.0
Adjusted General
and
administrative
expenses (34,614) (9.9) (39,594) (5,836) (14.5) (81,780) (12.6) (83,029) (12,238) (15.7)
C. Adjusted corporate EBITDA and
adjusted corporate EBITDA
margin
For the three months ended June 30, For the six months ended June 30
2025 2026 2025 2026
% of Total % of Total % of Total
RMB Revenues RMB US$ Revenues RMB Revenues RMB US$ % of Total Revenues
Operating loss (47,779) (13.7) (58,107) (8,564) (21.3) (133,082) (20.6) (130,382) (19,216) (24.6)
Adjusted for:
Depreciation and
amortization 37,158 10.6 29,423 4,336 10.8 74,171 11.4 60,465 8,911 11.4
Share-based
compensation
expenses 749 0.2 320 47 0.1 1,825 0.3 1,836 271 0.3
Impairment
losses of
rental
deposits 2,335 0.7 2,347 346 0.9 4,896 0.8 5,440 802 1.0
Professional
fees related to
financing
programs - - - - - 1,007 0.2 - - -
Impairment
losses of
long-lived
assets 9,485 2.7 4,563 673 1.7 21,103 3.2 10,450 1,540 2.0
Loss on disposal
of property and
equipment 247 0.1 502 74 0.2 2,980 0.5 1,114 164 0.2
Adjusted
Corporate
EBITDA 2,195 0.6 (20,952) (3,088) (7.6) (27,100) (4.2) (51,077) (7,528) (9.7)
D. Adjusted net
loss and
adjusted net
loss margin
For the three months ended June 30, For the six months ended June 30
2025 2026 2025 2026
% of Total % of Total % of Total
RMB Revenues RMB US$ Revenues RMB Revenues RMB US$ % of Total Revenues
Net loss (75,925) (21.8) (97,441) (14,361) (35.6) (134,866) (20.9) (206,716) (30,466) (39.0)
Adjusted for:
Share-based
compensation
expenses 749 0.2 320 47 0.1 1,825 0.3 1,836 271 0.3
Professional
fees related to
financing
programs - - - - - 1,007 0.2 - - -
Impairment
losses of
long-lived
assets 9,485 2.7 4,563 673 1.7 21,103 3.2 10,450 1,540 2.0
Impairment
losses of
rental
deposits 2,335 0.7 2,347 346 0.9 4,896 0.8 5,440 802 1.0
Loss on disposal
of property and
equipment 247 0.1 502 74 0.2 2,980 0.5 1,114 164 0.2
Changes in fair
value of
convertible
notes 23,383 6.7 34,857 5,137 12.7 (6,075) (0.9) 67,459 9,942 12.7
Adjusted Net
loss (39,726) (11.4) (54,852) (8,084) (20.0) (109,130) (16.8) (120,417) (17,747) (22.8)
E. Adjusted
basic and
diluted net
loss per
Ordinary Share
For the three months ended June 30, For the six months ended June 30
2025 2026 2025 2026
Unadjusted Unadjusted Unadjusted
and Adjusted and Adjusted and Adjusted
Basic and Basic and Basic and Unadjusted and
diluted loss diluted loss diluted loss Adjusted Basic and
per Ordinary per Ordinary per Ordinary diluted loss per
RMB Share RMB RMB US$ Share USD RMB Share RMB RMB US$ Ordinary Share USD
Net loss
attributable to
shareholders of
the Company (75,455) (2.32) (97,469) (14,365) (0.44) (133,476) (4.10) (207,365) (30,562) (0.94)
Adjusted for:
Share-based
compensation
expenses 749 0.02 320 47 0.00 1,825 0.06 1,836 271 0.01
Professional
fees related to
financing
programs - - - - - 1,007 0.03 - - -
Impairment
losses of
long-lived
assets 9,485 0.29 4,563 673 0.02 21,103 0.65 10,450 1,540 0.05
Impairment
losses of
rental
deposits 2,335 0.07 2,347 346 0.01 4,896 0.15 5,440 802 0.02
Loss on disposal
of property and
equipment 247 0.01 502 74 0.00 2,980 0.09 1,114 164 0.01
Changes in fair
value of
convertible
notes 23,383 0.72 34,857 5,137 0.16 (6,075) (0.19) 67,459 9,942 0.30
Adjusted Net
loss
attributable to
shareholders of
the Company (39,256) (1.21) (54,880) (8,088) (0.25) (107,740) (3.31) (121,066) (17,843) (0.55)
Weighted average
shares
outstanding
used in
calculating
basic and
diluted loss
per share 32,541,772 N/A 32,519,377 32,519,377 N/A 32,540,993 N/A 32,519,377 32,519,377 N/A
Adjusted basic
and diluted net
loss per
Ordinary Share (1.21) (1.69) (0.25) (3.31) (3.72) (0.55)