Atour Lifestyle (US:ATAT)2023-05-18 23:21Financial Data and Key Metrics Changes - The company's net revenues for Q1 2023 grew by 71.2% year-over-year to RMB774 million, driven by growth in both hotel and scenario-based retail businesses [17] - Adjusted net income for Q1 increased by 2,114.3% year-over-year to RMB160 million, with an adjusted net profit margin of 20% [21][36] - Adjusted EBITDA for Q1 2023 was RMB231 million, up by 584.8% year-over-year [21] Business Line Data and Key Metrics Changes - Revenues from managed hotels for Q1 2023 were RMB447 million, up by 63.2% year-over-year, with RevPAR surpassing pre-pandemic levels at RMB331 [17][18] - Revenues from leased hotels increased by 67.9% year-over-year to RMB187 million, with RevPAR also exceeding pre-pandemic levels at RMB464 [18] - Scenario-based retail revenue grew by 174.3% year-over-year to RMB113 million, contributing significantly to the overall revenue growth [18][13] Market Data and Key Metrics Changes - The hotel network expanded to 968 hotels, a year-over-year increase of 23%, with a pipeline of 413 hotels under development [10] - Membership in the loyalty program surpassed 38 million, with a significant portion of members aged 30 to 40 [11] Company Strategy and Development Direction - The company aims to open 2,000 premier hotels over three years, establishing a benchmark for the Chinese experience in the upper midscale hotel industry [6] - The retail business is positioned as a natural extension of the hospitality expertise, focusing on sleep-related products to enhance customer experience [12][15] Management Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding RevPAR recovery, projecting a 110% recovery rate for the full year [24] - The company is focused on quality over quantity in hotel openings, emphasizing the importance of maintaining high standards [29] - Management highlighted the potential in China's sleep market and the ongoing development of sleep-related products [15][41] Other Important Information - The company maintained a healthy cash position with RMB2.0 billion in cash and cash equivalents at the end of Q1 [21] - The retail business achieved a milestone of RMB100 million in revenue for Q1, with expectations to exceed RMB400 million for the full year [43] Q&A Session Summary Question: RevPAR recovery in Q2 and full-year guidance adjustments - Management noted that Q1's RevPAR recovery was partially due to retaliatory rebound factors and expressed confidence in reaching a 110% recovery rate for the full year [23][24] Question: Improvement in franchisee relationships and hotel openings - Management reported a record high of 94 new hotel signings in Q1, with over 40% being repurchases from existing franchisees, supporting the target of 280 new openings for the year [27][28] Question: Competitive landscape in the mid to upscale hotel segment - Management emphasized a focus on experience-driven strategies to enhance competitiveness, maintaining a leading market share in the upper midscale segment [31][33] Question: Breakdown of reasons for outperforming earnings - Management attributed the strong performance to a higher gross margin driven by the recovery of RevPAR and growth in the retail business, with expenses decreasing as a percentage of revenue [35][36] Question: Growth potential of the scenario-based retail business - Management expressed optimism about the retail business's growth, particularly in the sleep product market, and highlighted the synergy between retail and hotel operations [39][41]