SHANGHAI, China and NEW YORK, USA – TH International Limited, the exclusive operator of Tim Hortons coffee shops and Popeyes restaurants in China has announced its unaudited financial results for the first quarter 2024. Total revenues reached RMB346.8 million (USD48.0 million), representing a 3.1% increase from the same quarter of 2023.
System sales1 reached RMB363.5 million (USD50.3 million), representing a 7.1% increase from the same quarter of 2023.
Net new store openings totaled 5 (Net closure of 15 company owned and operated stores for Tims, net opening of 19 franchised stores for Tims, and net opening of one company owned and operated stores for Popeyes)
Adjusted store EBITDA2 was RMB6.1 million (USD0.8 million), representing a 2.0% year-over-year growth.
Adjusted store EBITDA margin3 was 2.0%, slightly improved from the same quarter in 2023.
Registered loyalty club members totaled 20.3 million members as of March 31, 2024, representing a 63.6% year-over-year growth.
Mr. Yongchen Lu, CEO & Director of Tims China, commented, “In Q1 2024, our system sales grew by 7.1%, and we continued to improve our bottom-line performance, marching towards achieving our first quarterly adjusted corporate EBITDA breakeven this year. Our registered loyalty club membership exceeded 20 million as of March 31, 2024, a 63.6% year-over-year growth, serving both as a pivotal catalyst for growth and a testament to our customers’ support and embrace of Tims China’s loyalty program.
Continuous product innovation remains a cornerstone of our strategic vision; we launched 14 new beverages and 18 new food products during the quarter. We just celebrated the meaningful milestones of our 5th anniversary in China as well as the 60th anniversary of the “Tim Hortons” brand in February. To commemorate both remarkable milestones and double celebrations, Tims China launched its Chinese version of “Double Double” latte series. Our collaborations with Tangle Angel and Dove Chocolate have also achieved significant success during the quarter.”
Mr. Lu added, “Our Popeyes brand maintains its robust growth trajectory. So far, we have successfully launched 14 Popeyes restaurants and are actively expanding our product offerings beyond the core fried chicken products. Our restaurants represent a solid base for further growth in Shanghai and beyond.”
Mr. Dong (Albert) Li, CFO of Tims China, commented, “During the first quarter of 2024, and in the face of headwinds, we continued to enhance our operational efficiency. We pared back costs at the headquarter level, and we pruned our underperforming stores. These actions allowed us to deliver year-over-year reductions in food and packaging costs, rental expenses, and labor costs (as a percentage of revenues from company owned and operated stores) by 1.0 percentage points, 0.9 percentage points, and 1.3 percentage points, respectively. Our adjusted general and administrative expenses as a percentage of total revenues decreased by 4.1 percentage points year-over-year.”
Mr. Li continued, “Going forward, and with driving profitable, and capital-efficient growth being front and center of everything we do, we will continue to optimize our store unit economics, roll out our differentiating made-to-order fresh food preparation model to drive traffic, enhance our supply chain capabilities and efficiencies, and facilitate our franchisees to manage the growth and profitability of their stores effectively.”
1 System sales is calculated as the gross merchandise value of sales generated from both company owned and operated stores and franchised stores.
2 Adjusted store EBITDA is calculated as fully burdened gross profit4 of company owned and operated stores excluding depreciation & amortization and store pre-opening expenses.
3 Adjusted store EBITDA margin is calculated as adjusted store EBITDA as a percentage of revenues from company owned and operated stores.
4 Fully burdened gross profit of company owned and operated stores, the most comparable GAAP measure to adjusted store EBITDA, was a loss of RMB33.4 million (USD4.6 million) for the three months ended March 31, 2024, compared to a loss of RMB35.9 million in the same quarter of 2023.
