TH International Limited reported its third‑quarter 2025 results for the period ended September 30, 2025, showing system sales of RMB419.9 million, up 12.8% from the same quarter a year earlier. The company’s total revenue fell 0.4% YoY to RMB358.0 million, a decline driven by a 5.7% drop in average ticket size that offset a modest rise in order volume.
Same‑store sales for company‑owned and operated outlets grew 3.3% YoY, but the contribution margin for those stores contracted sharply from 13.3% in Q3 2024 to 7.7% in Q3 2025. The margin squeeze reflects a shift in the delivery mix toward lower‑margin channels and intensified price competition in the Chinese coffee market.
Operating loss widened to RMB65.7 million, compared with RMB55.9 million a year earlier, while adjusted corporate EBITDA turned to a loss of RMB15.0 million from a gain of RMB2.0 million in Q3 2024. The loss of EBITDA highlights the impact of higher operating expenses and the margin compression noted above.
Net loss for the quarter was RMB73.8 million, down from RMB87.4 million in Q3 2024, and the company’s cash balance stood at RMB159.3 million as of September 30. The cash position provides a buffer for ongoing capital‑light expansion through sub‑franchising and the recent issuance of US$89.9 million in senior secured convertible notes due 2029.
Management emphasized that the “Light & Fit Lunch Box” platform and the sub‑franchising model are key drivers of food‑revenue growth and cash‑flow generation. CEO Yongchen Lu noted that the company is focusing on higher‑margin MTO stores and leveraging its loyalty club, which now has 27.9 million members, up 22.3% YoY.
The company completed the repurchase of all outstanding variable‑rate convertible senior notes due 2026, further strengthening its balance sheet ahead of future expansion.
No forward guidance was disclosed in the release, leaving investors to interpret the results in the context of the company’s ongoing margin challenges and strategic focus on high‑margin store formats.
The earnings report underscores a mixed performance: top‑line system sales growth contrasts with declining total revenue and widening losses, while margin compression signals continued competitive pressure. The company’s financing activities and loyalty program expansion suggest a long‑term growth strategy, but the current profitability trajectory remains a concern for investors.
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