Financial Performance - At the end of Q2 2025, the company reported revenue of 2.469 billion yuan, a year-on-year increase of 37.4% [1] - Adjusted net profit reached 427 million yuan, up 30.2% year-on-year [1] - Adjusted EBITDA was 610 million yuan, reflecting a 37.7% year-on-year growth [1] - The registered member count reached 102 million, marking a 34.7% increase year-on-year [1] Operational Metrics - The average revenue per available room (RevPAR) was 343 yuan, with an average daily rate (ADR) of 433 yuan and an occupancy rate (OCC) of 76.4% [1] - The number of operating hotels increased to 1,824, a growth of 29.2% year-on-year, with a pipeline of 816 projects [1] Market Strategy - The company has established a multi-tiered brand and product system to accurately target different market segments, creating differentiated competitive barriers [1] - The mid-to-high-end market strategy includes the collaboration of the Atour 3 and 4 series, catering to diverse consumer preferences and accommodation needs [1] - The Atour 3 series focuses on mainstream business travel scenarios, while the Atour 4 series targets the combined needs of business travel and urban vacations, with over 30 Atour 4.0 hotels already opened [1] Retail Business - In Q2, the company's GMV (Gross Merchandise Volume) reached 1.144 billion yuan, a significant year-on-year increase of 84.6% [2] - During the "618" shopping festival, GMV hit 578 million yuan, up 86.1% year-on-year, setting a new sales record for promotional events [2] - Based on the positive outlook for retail business, the company has raised its full-year revenue guidance for 2025 to a 30% year-on-year growth [2] Leadership Insights - The founder and CEO, Wang Haijun, emphasized the commitment to continuous innovation in accommodation and retail products, aiming to build competitive barriers through differentiated experiences [2]

Core Viewpoint - Atour Group has raised its revenue guidance for the full year 2025 to a 30% year-on-year growth based on positive expectations for its retail business [10][11]. Financial Performance - In Q2, Atour Group reported revenue of 2.469 billion RMB, a year-on-year increase of 37.4% [3]. - Adjusted net profit reached 427 million RMB, up 30.2% year-on-year [3]. - Adjusted EBITDA was 610 million RMB, reflecting a 37.7% year-on-year growth [3]. Hotel Operations - As of the end of Q2, Atour Group operated 1,824 hotels, a 29.2% increase year-on-year, with a pipeline of 816 projects [7]. - The overall RevPAR was 343 RMB, with an ADR of 433 RMB and an occupancy rate of 76.4% [7]. - The company has developed a multi-tiered brand and product system to target different market segments, establishing a differentiated competitive barrier [7]. Market Segmentation - In the mid-to-high-end market, Atour's 3 and 4 series hotels cater to diverse user preferences and accommodation needs, providing various investment options for franchisees [7]. - The 3.6 series focuses on enhancing convenience and comfort, with the first hotels already opened and a positive signing momentum [7]. - The 4.0 series targets business travel and urban vacation needs, with over 30 hotels opened, marking a significant leap from product innovation to quality verification [7]. Retail Business Growth - Atour's retail business continued strong growth, with GMV increasing by 84.6% to 1.144 billion RMB [10]. - During the 618 shopping festival, retail GMV reached 578 million RMB, a year-on-year increase of 86.1%, setting a new sales record [10]. - Atour Planet has launched several new products, including the Deep Sleep Pillow Pro 3.0, which features innovative design and support structures [10]. Membership and User Engagement - Atour's membership base has surpassed 100 million, with a new growth system for gold members that aligns with user needs [10]. - The company emphasizes a user-centric approach, continuously optimizing and expanding its product matrix to enhance market recognition [10].

Financial Data and Key Metrics Changes - The company's net revenues for 2025 grew by 37.4% year over year and 29.5% quarter over quarter to RMB 2,469 million [25] - Adjusted net income for 2025 increased by 30.2% year over year, with an adjusted net profit margin of 17.3%, a decrease of 0.9 percentage points year over year due to a rise in the overall effective tax rate [31][54] - Gross margin for hotel businesses improved to 38.3% in 2025 from 35.7% in 2024, while retail gross margin expanded to 53.3% from 50.6% during the same period [28][29] Business Line Data and Key Metrics Changes - RevPAR for managed hotels was RMB 340 for 2025, compared to RMB 302 for the previous quarter, while revenues from monetized hotels increased by 26.5% year over year [26] - Retail business GMV rose by 84.6% year over year to RMB 1,144 million, driven by strong sales and promotional campaigns [17] - The number of hotels in operation increased to 1,824, representing a 29.2% year over year increase, with 118 hotels opened in the second quarter [9] Market Data and Key Metrics Changes - The retail business achieved a new sales record during the June 18 shopping festival, reaching RMB 578 million, up more than 86% from the same period last year [18] - The number of registered individual members surpassed 102 million by the end of the second quarter, representing a 34.7% year over year increase [21] Company Strategy and Development Direction - The company aims to maintain a long-term growth principle with a focus on hotel quality, ensuring each new hotel aligns with brand standards [8] - The strategic priority for the retail business includes enhancing R&D capabilities and optimizing supply chain management to drive high-quality growth [20] - The company plans to achieve a target of 2,000 premier hotels by the end of the year, with a focus on quality over quantity in hotel openings [40][43] Management's Comments on Operating Environment and Future Outlook - Management noted that while overall demand has not fully recovered, summer leisure travel showed resilience, and they expect RevPAR pressure in Q3 to ease compared to Q2 [35] - The company anticipates challenges due to increasing market supply but believes leveraging differentiated experiential advantages will help navigate market cycles [36] - The adjusted comprehensive tax rate is expected to rise to 30% this year, which will affect the full-year net profit margin [54] Other Important Information - The company has launched new products in the retail segment, including the Deep Sleep Memory Foam Pillow Pro 3.0, which received positive market feedback [48] - The flagship Sahe Hotel in Shenzhen achieved a RevPAR exceeding RMB 800 in its first full month of operation, indicating strong market reception [59] Q&A Session Summary Question: RevPAR trend performance in Q3 and full-year outlook - Management indicated that overall demand has not yet recovered to last year's levels, but summer leisure travel shows resilience, expecting RevPAR pressure in Q3 to ease [35][36] Question: Changes to hotel openings and franchise signings - The company opened 239 new hotels in the first half and expects to achieve its full-year guidance of 500 new hotel openings [40][43] Question: Full-year revenue guidance for the retail business - The retail business has raised its full-year growth guidance to 60% year over year, driven by new product launches and strong market performance [48] Question: Stability of adjusted net income margin - The company anticipates a year-on-year decline in full-year net profit margin due to structural changes in revenue and increased effective tax rates [54] Question: Strategic focus on new hotel brands - The Sahe Hotel brand will focus on quality first, with several high-quality projects in key cities planned for opening [59][62]

Financial Data and Key Metrics Changes - The company's net revenues for Q2 2025 grew by 37.4% year over year and 29.5% quarter over quarter to RMB 2,469 million [25] - Revenues from monetized hotels increased by 26.5% year over year and 25.9% quarter over quarter to RMB 1,299 million [25] - Adjusted net income for 2025 increased by 30.2% year over year, with an adjusted net profit margin of 17.3%, a decrease of 0.9 percentage points year over year due to a rise in the overall effective tax rate [31][57] Business Line Data and Key Metrics Changes - RevPAR for the hotel business was RMB 343 in Q2 2025, representing 95.7% of the level in the same period of 2024 [7] - Retail business GMV rose by 84.6% year over year to RMB 1,144 million, with online channels accounting for over 90% of total GMV [17] - Revenues from the retail business increased by 79.8% year over year and 39.1% quarter over quarter [27] Market Data and Key Metrics Changes - The total number of monetized hotels increased from 1,382 as of June 30, 2024, to 1,800 as of June 30, 2025 [26] - The number of hotels under development reached 816, supporting the strategic goal of 2,000 premier hotels [10] - The retail segment's revenue accounted for around 38% of total revenue, up from 29% the previous year, indicating a structural change in revenue outlook [56] Company Strategy and Development Direction - The company aims to maintain a long-term quality-first approach in hotel openings and closures, with a target of 500 new hotel openings in 2025 [41] - The focus is on building a strong brand moat through customer reputation and product innovation across both hotel and retail businesses [5][6] - The company plans to enhance R&D capabilities and optimize supply chain management to drive high-quality growth in the retail business [22][51] Management's Comments on Operating Environment and Future Outlook - The management noted that while overall demand is recovering, challenges remain due to market supply increases [36] - The company expects RevPAR pressure in Q3 to ease compared to Q2, with a gradual improvement in full-year RevPAR recovery [36] - The adjusted comprehensive tax rate is expected to rise to 30% this year, impacting the full-year net profit margin [57] Other Important Information - The company opened 118 hotels in Q2 2025, maintaining a steady pace of expansion [8] - The first Sahe flagship hotel opened in Shenzhen and received widespread acclaim for its unique experience [14] - The membership program surpassed 102 million registered individual members, representing a 34.7% year-over-year increase [22] Q&A Session Summary Question: RevPAR trend performance in Q3 and full-year outlook - Management indicated that overall demand has not yet recovered to last year's levels, but summer leisure travel shows resilience, expecting RevPAR pressure to ease in Q3 [36] Question: Changes to hotel openings and closures guidance - Management confirmed a target of 500 new hotel openings for 2025, with 34 closures expected, maintaining a focus on high-quality properties [41][42] Question: Full-year revenue guidance for the retail business - The retail business raised its full-year growth guidance to 60% year over year, driven by new product launches and strong market feedback [50] Question: Full-year adjusted net income margin outlook - Management anticipates a decline in full-year net profit margin due to structural changes in revenue and an increase in the effective tax rate [57] Question: Strategic focus on new hotel brands - The Sahe brand aims to control expansion while establishing a benchmark in experience, with several projects in key cities planned [62]

Business Performance - 2Q25 RevPAR was 95.7% of 2024's level for the same period[11] - 2Q25 Same-Hotel RevPAR was 94.4% of 2024's level for the same period[14] - The number of new hotel openings in 2Q25 was 118[18] - The number of hotels in operation reached 1,824 as of June 30, 2025[19] - The number of hotels in the pipeline reached 816 as of June 30, 2025[19] Retail Business - Retail GMV increased by 84.6% from RMB 620 million in 2Q24 to RMB 1,144 million in 2Q25[43] - 618 Shopping Festival GMV increased by 86.1% from RMB 310 million in 2024 to RMB 578 million in 2025[43] - The company ranked No 1 in sales in the pillow category on major third-party platforms[47] Membership - The number of registered individual members increased by 34.7% from 76.2 million in 2Q24 to 102.6 million in 2Q25[55] - Core CRS channel accounted for 61.5% of total room-nights sold[57] - Corporate members' contribution accounted for 20.0% of total room nights sold[57] Financial Performance - Net revenues increased by 37.4% YoY from RMB 1,797,047 thousand in 2Q24 to RMB 2,468,549 thousand in 2Q25[66] - Adjusted net income increased by 30.2% from RMB 328 million in 2Q24 to RMB 427 million in 2Q25[79] - Adjusted EBITDA increased by 37.7% from RMB 443 million in 2Q24 to RMB 610 million in 2Q25[82] Outlook - The company expects a total net revenues growth rate of 30% YoY for full year 2025[87]

Core Viewpoint - Atour Lifestyle Holdings Limited reported strong financial results for the second quarter of 2025, with significant year-over-year growth in revenues, net income, and operational metrics, despite a competitive landscape in the hospitality industry. Financial Performance - Net revenues for Q2 2025 increased by 37.4% year-over-year to RMB2,469 million (US$345 million) from RMB1,797 million in Q2 2024 [8] - Net income for Q2 2025 rose by 39.8% year-over-year to RMB425 million (US$59 million) compared to RMB304 million in Q2 2024 [15] - Adjusted net income (non-GAAP) for Q2 2025 increased by 30.2% year-over-year to RMB427 million (US$60 million) from RMB328 million in Q2 2024 [16] - EBITDA (non-GAAP) for Q2 2025 grew by 45.1% year-over-year to RMB608 million (US$85 million) from RMB419 million in Q2 2024 [17] - Adjusted EBITDA (non-GAAP) for Q2 2025 increased by 37.7% year-over-year to RMB610 million (US$85 million) from RMB443 million in Q2 2024 [17] Operational Highlights - As of June 30, 2025, Atour operated 1,824 hotels with a total of 204,784 hotel rooms, reflecting year-over-year increases of 29.2% in the number of hotels and 26.7% in hotel rooms [2] - The average daily room rate (ADR) for Q2 2025 was RMB433, a slight decrease from RMB441 in Q2 2024 [3] - The occupancy rate for Q2 2025 was 76.4%, down from 78.4% in Q2 2024 [3] - Revenue per available room (RevPAR) was RMB343 for Q2 2025, compared to RMB359 in Q2 2024 [6] Business Segments - Revenues from manachised hotels for Q2 2025 increased by 26.5% to RMB1,299 million (US$181 million) from RMB1,027 million in Q2 2024, driven by ongoing hotel network expansion [10] - Revenues from retail for Q2 2025 surged by 79.8% to RMB965 million (US$135 million) from RMB537 million in Q2 2024, attributed to growing brand recognition and effective product innovation [12] - Revenues from leased hotels decreased by 17.0% to RMB150 million (US$21 million) in Q2 2025, primarily due to a reduction in the number of leased hotels [12] Cash Flow and Debt - Operating cash inflow for Q2 2025 was RMB767 million (US$107 million) [18] - As of June 30, 2025, the company had total outstanding borrowings of RMB67 million (US$9 million) [19] Outlook - For the full year of 2025, the company expects total net revenues to increase by 30% compared to full-year 2024 [20]

Group 1 - Atour Lifestyle Holdings Limited (ATAT) is a China-based lifestyle brands and hotel company with a current year earnings estimate revised 1.9% downward over the last 60 days [1] - La-Z-Boy Incorporated (LZB) is a furniture company that has seen its current year earnings estimate revised 10.6% downward over the last 60 days [1] - Primo Brands Corporation (PRMB) is a beverage company with a current year earnings estimate revised 14.4% downward over the last 60 days [2]

Core Insights - Atour is planning a secondary listing in Hong Kong to raise several hundred million dollars, aiming to find new growth engines amid pressures on its main business and controversies surrounding its pillow retail business [1][6][62] - The company has faced multiple failed IPO attempts since 2019, with three attempts to list on A-shares and one on the US market, primarily due to issues such as data discrepancies in its prospectus [2][4][62] - Despite a significant increase in market capitalization since its successful listing on NASDAQ in 2022, Atour's core hotel business is experiencing growth bottlenecks, with declining average daily rates (ADR) and revenue per available room (RevPAR) [4][12][62] Company Overview - Atour, founded in 2013, has rapidly expanded to become one of China's largest mid-to-high-end hotel chains, with 1,727 operating hotels and over 194,559 rooms as of March 2025 [9][11] - The company operates under a "light asset + strong operation" model, focusing on franchise expansion and diversifying revenue streams beyond room bookings [11][19] - Retail sales, particularly through its proprietary sleep products, have become a significant revenue source, contributing approximately 30% to total income [7][13][19] Financial Performance - In 2023, Atour reported revenues of 4.666 billion RMB and a net profit of approximately 740 million RMB, with a substantial increase in 2024 to 7.248 billion RMB and an adjusted net profit of 1.306 billion RMB, reflecting a year-on-year growth of 72.2% [11][12][19] - The retail segment has shown remarkable growth, with retail revenue reaching 694 million RMB in Q1 2025, a 66.5% increase from the previous year [16][24] - However, the hotel business has faced challenges, with Q1 2025 showing a decline in net profit by 5.5% year-on-year due to falling room prices and occupancy rates [12][19] Market Position and Competition - Atour holds the leading position in China's mid-to-high-end hotel market, but faces intense competition from established players like Jin Jiang and Huazhu, which have significantly larger hotel networks [52][58] - The hotel industry is experiencing a trend of oversupply, leading to pressure on occupancy rates and revenue, which poses a challenge for Atour's growth strategy [60][61] - The company's reliance on retail sales for revenue growth raises concerns about sustainability, especially as competition in the sleep product market intensifies [19][25][62] Challenges and Controversies - Atour has faced several controversies related to service quality and hygiene, including a significant incident involving hospital-labeled pillowcases, which has damaged its brand reputation [35][49][62] - The rapid expansion through franchising has led to inconsistencies in service quality, with increasing customer complaints regarding cleanliness and service standards [31][49][62] - The company must address these operational challenges to maintain customer loyalty and brand integrity in a competitive market [62]

Core Viewpoint - Atour Hotel has faced significant public backlash due to repeated hygiene and safety incidents, raising concerns about its brand image and customer trust [2][5][18]. Incident Summary - A recent incident involved a guest discovering a potentially used toothpick at the Nanning Wuxiang Headquarters Atour Hotel, leading to health concerns and hospitalization for testing [2][7]. - This follows a previous incident in June where a hotel was found to have hospital pillowcases, resulting in public apology and removal from booking platforms [4][10]. - The hotel has been criticized on social media, with many users expressing disgust and a loss of trust in the brand [7][12]. Booking Status - Following the incident, the affected hotel was temporarily unavailable for booking on major online platforms, although some rooms have since become available again [9][6]. Hygiene Issues - Atour Hotel has experienced multiple hygiene-related complaints this year, including reports of hair in showers and insect infestations, leading to over 1,500 complaints on consumer platforms [12][13]. - The company has been criticized for its rapid expansion strategy, which may have compromised quality control and hygiene standards [16][18]. Financial Performance - Despite the hygiene issues, Atour Hotel reported a revenue of 1.906 billion yuan in Q1 2025, a 29.8% increase year-on-year, with a significant expansion in the number of hotels [15]. - However, key performance indicators such as average daily rate (ADR) and occupancy rate (OCC) have declined, indicating potential challenges in maintaining customer satisfaction [16]. Management Concerns - The founder, Wang Haijun, has faced scrutiny following his significant stock sales, raising questions about his commitment to the brand's values and customer care [18][19].

Core Viewpoint - Atour Hotel has faced significant public backlash due to repeated hygiene and safety incidents, raising concerns about its brand image and customer trust [2][12][15]. Group 1: Recent Incident - A recent incident involved a guest discovering a potentially used toothpick at the Nanning Wuxiang Headquarters Atour Hotel, leading to health concerns and a hospital visit for testing [2][4]. - Following the incident, the hotel was temporarily unavailable for booking on major online platforms, indicating a potential impact on occupancy rates [6][12]. Group 2: Previous Hygiene Issues - Earlier this year, Atour Hotel faced criticism for a separate incident involving hospital pillowcases, which resulted in the affected hotel being taken offline from the company's app and mini-program [8][12]. - In March, another Atour location was reported to have hair found in the shower, further compounding the brand's hygiene issues [10]. Group 3: Customer Complaints - Customer complaints regarding hygiene and safety have surged, with over 1,500 complaints logged, reflecting a growing dissatisfaction among guests [12][15]. - Recent reports also include guests finding bugs in their rooms, leading to health issues and unaddressed complaints [11]. Group 4: Business Performance - Despite rapid expansion, with the number of hotels increasing from 570 to 1,727 and revenue reaching 1.906 billion yuan in Q1 2025 (up 29.8% year-on-year), key performance metrics like average daily rate and occupancy rate have declined [13][14]. - The average daily rate fell from 430 yuan to 418 yuan, and occupancy rate dropped from 73.3% to 70.2% year-on-year [14]. Group 5: Management and Strategy - Atour's aggressive expansion strategy, heavily reliant on franchising (over 98.5% of hotels), has raised concerns about quality control and management oversight [14][15]. - The founder, Wang Haijun, has faced scrutiny following significant stock sales, prompting questions about his commitment to the brand's values of "humanistic care" amidst ongoing hygiene controversies [15].