TH International (THCH) Q1 2026 earnings summary

Executive summary

• Strategic focus shifted from scale to quality growth, with operational optimization and reduced discounting in Q1 2026.

• Store network reached 1,026 locations, but net new store growth slowed, with a net decrease of 21 stores in Q1 2026 due to pruning underperforming stores; plans to resume net new openings in Q2 2026.

• Registered loyalty club members surged 42.9% year-over-year to 35.9 million, with digital orders accounting for 87.5% of company-owned store revenues.

• Franchise business expanded rapidly, with over 10,500 applications, nearly 260 new stores opened by March 2026, and franchised stores growing from 455 to 485 year-over-year.

• Continued product innovation and cultural collaborations, including 21 new products, IP partnerships, and seasonal offerings, to drive engagement among younger consumers.

Financial highlights

• Total revenues for Q1 2026 were RMB 256.7 million (USD 37.2 million), down 14.6% year-over-year, with system sales at RMB 322.9 million (USD 46.8 million), down 14.2%.

• Revenues from company-owned stores fell 18.7% year-over-year to RMB 207.2 million.

• Same-store sales growth for company-owned stores was -12.4% to -13.2% in Q1 2026, with comparable transactions down 8.3% and average ticket size down 4.8% to 7.5%.

• Adjusted corporate EBITDA margin was -11.8% in Q1 2026, compared to -9.8% in Q1 2025.

• Net loss widened to RMB 109.3 million (USD 15.8 million); adjusted net loss was RMB 65.6 million (USD 9.5 million).

Outlook and guidance

• Management expects same-store sales to recover in Q2 and improve throughout 2026, supported by marketing campaigns and franchise expansion.

• Near-term priorities include sustainable revenue growth, expanding store-level profitability, optimizing cost structure, and achieving corporate EBITDA breakeven.

• Sub-franchise businesses are expected to continue contributing positively to cash flows and profitability.