Tims China Announces Second Quarter 2024 Financial Results

Core Insights - TH International Limited, the exclusive operator of Tim Hortons in China, achieved its first-ever positive adjusted corporate EBITDA of RMB4.1 million (USD0.6 million) in Q2 2024, a significant improvement from a loss of RMB40.8 million in the same quarter of 2023 [2][16][4] - The company reported total revenues of RMB366.8 million (USD50.5 million), a decrease of 10.9% year-over-year, while system sales increased by 1.6% to RMB403.8 million (USD55.6 million) [2][6] - The adjusted store EBITDA reached RMB33.2 million (USD4.6 million), marking an 81.7% increase from the same quarter of 2023, with an adjusted store EBITDA margin of 10.3%, up 5.3 percentage points year-over-year [2][20][4] Financial Performance - Total revenues for Q2 2024 were RMB366.8 million (USD50.5 million), down from RMB411.7 million in Q2 2023 [2][6] - Company-owned store sales were RMB322.3 million (USD44.4 million), a decrease of 11.1% from RMB362.6 million in Q2 2023, primarily due to store closures and a 13.8% decline in same-store sales [7][8] - Adjusted corporate EBITDA margin improved to 1.1%, up 11.0 percentage points from negative 9.9% in Q2 2023 [16] Cost Management - The company successfully reduced various costs, including food and packaging costs by 19.2%, rental expenses by 17.5%, and payroll expenses by 23.4% year-over-year [8][9][10] - Marketing expenses decreased by 49.2% to RMB12.8 million (USD1.8 million), and general and administrative expenses fell by 68.7% to RMB39.8 million (USD5.5 million) [13][14] Store Expansion and Operations - The company opened 31 new franchised stores in Q2 2024, bringing the total number of franchised stores to 333, up from 129 a year earlier [2][7] - Registered loyalty club members increased by 45.4% year-over-year to 21.4 million as of June 30, 2024 [3] Future Outlook - The management emphasized a focus on profitable growth, enhancing the franchise network, and improving operational efficiency to drive bottom-line profitability [5][4] - The company aims to strengthen its brand and expand its freshly prepared food offerings while collaborating closely with sub-franchisees [5]