Summary of Jiamaojiu Group Conference Call Company Overview - Jiamaojiu Group has closed 132 underperforming direct-operated stores, currently operating a total of 510 stores, including 22 franchise stores and 33 located in Hong Kong, Macau, and overseas, aiming to optimize store structure [2][3] Key Points and Arguments New Store Model Implementation - The company has launched the 5.0 Fresh Model for its Tai Er brand, focusing on family dining options and upgraded environments and services, with over 160 new model stores opened [2][3] - New model stores have seen a 10% year-on-year increase in revenue and over 15% growth in dine-in revenue [2][5] - The average customer spending has increased by 2-3 RMB due to menu adjustments and improved service, attracting more customers [2][6] Cost Management and Profitability - Despite an increase in workforce by 3-4 employees per new model store, the company has effectively controlled labor costs through training and supply chain optimization [7][9] - The company aims for a gross margin of 64%, with labor costs at 20%-21% and rent below 10%, targeting an operating profit margin of over 18% by 2027 [9][10] - The company is optimistic about future profit recovery, expecting to achieve a stable state for new model stores by 2027 [9][10] Sales Performance and Market Outlook - Same-store sales turned positive starting from the last week of November 2025, with expectations for December to show significant recovery [12] - The new model stores have outperformed traditional stores, particularly in first-tier cities like Beijing and Shanghai, with a 15% increase in dine-in sales compared to a 10% decline in traditional models [15] Future Expansion Plans - The company plans to complete the renovation of over 200 stores by mid-2026, with no specific annual opening targets but focusing on locations with a two-year payback period [13][25] - The company is exploring new brand opportunities, including a new barbecue brand "Zhao Zhao Na Bian," with plans to open its first store in Guangzhou [21] Financial Performance Expectations - The company anticipates a more favorable financial report for 2026, with all unprofitable stores closed by the end of 2025 and a significant reduction in impairment losses [23][24] - The dividend payout ratio is expected to remain at a minimum of 40%, with adjustments based on actual performance [27] Additional Important Insights - The company is focusing on using fresh ingredients sourced directly from suppliers to balance procurement costs and enhance product quality [10] - The transition to a fresh model has not negatively impacted store efficiency; instead, it has improved overall store performance [17] - The company has established central kitchens in Guangzhou, Shanghai, and Chongqing, with further expansions planned [19] This summary encapsulates the key insights from Jiamaojiu Group's conference call, highlighting their strategic adjustments, financial expectations, and market outlook.

Summary of Jiamaojiu Group Conference Call Company Overview - **Company**: Jiamaojiu Group - **Date**: November 10, 2025 Key Points Industry and Company Performance - In September 2025, Jiamaojiu Group experienced a decline in foot traffic due to public sentiment surrounding prepared dishes, leading to fluctuations in same-store sales. However, a rapid recovery began in late October, with expectations of positive growth by year-end [2][3] - The Taier brand has been actively promoting a fresh model, surpassing 120 stores, with same-store data outperforming the old model by approximately 15 percentage points. By the end of 2025, over 200 stores are expected, with a complete upgrade planned by mid-2026 [2][5] Store Management and Strategy - The company is closing underperforming stores, with Taier closing about 110 stores in the first half of 2025 and an estimated total of 130 closures for the year. This strategy aims to alleviate financial burdens [2][12] - Jiamaojiu and Song Hotpot are also exploring new models, with plans to open their first fresh model stores in Guangzhou [2][6] Sales and Customer Trends - Same-store sales for Jiamaojiu Group's brands showed signs of stabilization in Q3 2025, particularly for the Taier brand, which saw a narrowing decline to -9%. Key cities like Beijing and Shanghai reported positive same-store sales [3][7] - The average customer spending has remained stable with an upward trend since Q3 2024 [3] Delivery and Dining Experience - The proportion of delivery sales increased to 23%-25% in Q2 2025 but is expected to stabilize around 20% as the company focuses on enhancing dine-in experiences [2][9] - The company maintains a neutral stance on delivery services, recognizing both efficiency benefits and potential customer experience risks [9] Financial Outlook and Cost Management - The company anticipates achieving same-store sales growth by October 2025, supported by increased store openings and closures of underperforming locations. The low base in Q4 2025 also enhances the likelihood of positive year-over-year comparisons [7] - The fresh model has increased SKU counts and average transaction values, with initial gross margins slightly lower but expected to recover as operational efficiencies improve [4][15] Competitive Landscape - Taier's fresh model has shown significant performance differences across cities, with same-store sales in some areas outperforming the old model by 20-40 percentage points [15][17] - The company is adapting its offerings to attract family and business customers, responding to shifts in consumer demographics and preferences [19][21] Future Plans - The focus for 2026 will be on upgrading existing stores rather than new openings, as the fresh model's data is still being validated [13][22] - The company aims to optimize its operational layout and close unprofitable locations to prepare for future growth [14][12] Additional Insights - The company has faced challenges with its delivery-only stores, which have not performed as expected, leading to a shift back to focusing on dine-in operations [11][12] - Taier has been proactive in addressing public concerns regarding prepared dishes by showcasing its cooking processes and enhancing menu offerings [20][21] This summary encapsulates the key insights and strategic directions of Jiamaojiu Group as discussed in the conference call, highlighting both challenges and opportunities within the current market landscape.