TH International (NASDAQ:THCH) Announces Earnings Results

TH International (NASDAQ:THCH) released its earnings results on Tuesday. The company reported ($0.25) EPS for the quarter, meeting the consensus estimate of ($0.25), FiscalAI reports. The business had revenue of $40.24 million for the quarter, compared to the consensus estimate of $42.14 million.

Here are the key takeaways from TH International’s conference call:

• Q2 results deteriorated sharply: revenue fell 21.7% year over year to RMB207.4 million, system sales declined 15.1%, and same-store sales dropped 17.8% as transactions fell, delivery subsidies receded, and marketing was underspent.
• Profitability weakened despite cost reductions, with company-operated store contribution margin declining to 5.7% from 9.6% and adjusted corporate EBITDA margin turning negative at 7.6%, versus positive 0.6% a year earlier.
• The company closed the initial tranche of a planned $55 million financing from Tim Hortons’ brand owner, providing funds for product innovation, increased marketing, and a more balanced mix of company-operated and franchise stores.
• New CEO John Chen outlined a turnaround focused on improving core coffee, breakfast, bakery, and afternoon offerings; strengthening marketing, CRM, service, and operations; closing underperforming locations; and selectively expanding in top-tier cities and high-traffic channels.
• Loyalty club membership exceeded 37.1 million, up 41.7% year over year, while food and packaging costs as a percentage of company-operated-store revenue improved by 1.8 percentage points to 28.3%.

TH International Stock Performance

Shares of THCH stock opened at $1.27 on Thursday. The company’s 50-day moving average is $1.70 and its 200 day moving average is $1.89. TH International has a one year low of $1.24 and a one year high of $3.25. The company has a market capitalization of $42.21 million, a price-to-earnings ratio of -0.57 and a beta of 0.50.

Wall Street Analysts Forecast Growth

Separately, Weiss Ratings reaffirmed a “sell (e+)” rating on shares of TH International in a research note on Friday, July 24th. One equities research analyst has rated the stock with a Sell rating, According to MarketBeat, the company has an average rating of “Sell”.

Institutional Investors Weigh In On TH International

A hedge fund recently raised its position in TH International stock. Susquehanna International Group LLP increased its stake in TH International Limited (NASDAQ:THCH) by 170.1% during the 3rd quarter, according to its most recent disclosure with the Securities and Exchange Commission. The fund owned 29,743 shares of the company’s stock after purchasing an additional 18,731 shares during the quarter. Susquehanna International Group LLP owned 0.09% of TH International worth $78,000 at the end of the most recent quarter. Hedge funds and other institutional investors own 91.85% of the company’s stock.

TH International Company Profile

TH International Limited operates Tim Hortons coffee shops in mainland China, Hong Kong, and Macau. The company offers brewed tea, coffee, milk tea, lemonade, hot chocolate, and coffee drinks. It is also involved in franchise related business. The company is based in Shanghai, the People's Republic of China.