Summary of the Conference Call for Jiumaojiu Industry and Company Overview - The conference call focuses on Jiumaojiu, specifically its brand Taier and its strategic shift towards fresh ingredients and product quality enhancement in the restaurant industry [2][3][4]. Key Points and Arguments New Model Implementation - Taier has launched a new model emphasizing fresh ingredients and product quality to enhance customer loyalty and repurchase rates, with plans to complete the transformation of all stores by the end of 2026 [2][3]. - New model stores outperformed old model stores by a 10 percentage point difference in same-store sales during July and August, despite a decline in September due to adverse factors [2][6]. - The company plans to accelerate the rollout of over 200 new model stores to gradually restore overall performance [2][6]. Financial Investments and Costs - The investment for large-scale renovations per store is approximately 1.8 million yuan, while small-scale adjustments range from 100,000 to 200,000 yuan [10]. - The introduction of fresh ingredients is expected to temporarily decrease gross margins by 1-2 percentage points, but it is anticipated that economies of scale will maintain gross margins at 64% [10][11]. - The company plans to invest over 300 million yuan in store renovations, funded by healthy operating cash flow [12]. Employee Incentives and Performance Metrics - The incentive mechanism for frontline employees has shifted from fixed salaries to performance-based pay, adjusted according to regional differences [13]. Profit Margin Expectations - Profit margins are expected to gradually recover starting in the second half of 2025 or 2026, driven by the new model and the closure of underperforming stores [14][15]. Store Closures and Financial Impact - As of the third quarter, 109 stores have been closed, with closures being dynamically assessed based on cash flow performance and city layout [16][17]. Response to Market Trends - The company has shifted focus from low-price competition to enhancing product quality and reasonable pricing, responding to changing consumer expectations [3][4]. - Taier is addressing concerns regarding pre-prepared dishes by returning to a model where live fish is delivered to stores, enhancing fresh ingredient offerings [18][19]. Retail Business Performance - Jiumaojiu's retail business saw significant growth in the first half of the year, with export revenue from ingredients and prepared dishes reaching 130 million yuan, up from 50 million yuan in the same period last year [23]. - The company aims to exceed 200 million yuan in retail revenue for the year, with successful products launched in Sam's Club and seasonal offerings [23][24]. Future Plans in Retail - Jiumaojiu plans to expand into international markets such as Canada, the US, and Japan, while also developing products tailored to overseas consumers [24][25]. Other Important Insights - The new model has shown positive customer feedback and increased repurchase rates, indicating a successful adaptation to consumer habits [9]. - The company is focusing on enhancing customer experience through improved service and restaurant environments [5][7]. - Membership engagement has improved in new model stores, with ongoing efforts to refine marketing strategies [22].
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