Tims China (Nasdaq: THCH) reported unaudited Q1 2026 results with total revenues of RMB256.7 million, down 14.6% year-over-year, and system sales of RMB322.9 million, down 14.2%.
Net loss widened to RMB109.3 million, while a definitive agreement for up to US$55 million in additional senior secured convertible notes was signed. Company owned and operated store contribution margin fell to 1.8%. Registered loyalty club members grew 42.9% year-over-year to 35.9 million. Franchised stores increased to 485; total stores were 1,026 with net closures of 21 in the quarter.
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AI-generated analysis. Not financial advice.
Positive
- Definitive agreement for up to US$55 million senior secured convertible notes
- Registered loyalty members up 42.9% year-over-year to 35.9 million
- Franchised store count increased from 455 to 485 year-over-year
- Other revenues grew 7.7% year-over-year to RMB49.5 million
- Operating loss improved from RMB85.3 million to RMB72.3 million
- Marketing expenses reduced 43.7% to RMB9.8 million
Negative
- Total revenues declined 14.6% year-over-year to RMB256.7 million
- System sales decreased 14.2% year-over-year to RMB322.9 million
- System-wide same-store sales growth at -13.2%; company stores at -12.4%
- Net loss widened from RMB58.9 million to RMB109.3 million
- Company store contribution margin fell from 6.7% to 1.8%
- Net closure of 21 stores; total stores down to 1,026
- Fully burdened gross profit loss increased to RMB17.9 million
- Adjusted Corporate EBITDA loss at RMB30.1 million, margin -11.8%
- Cash and equivalents decreased to RMB111.4 million from RMB129.7 million
Q1 2026 total revenues
RMB256.7M
Down 14.6% vs Q1 2025 (RMB300.7M)
Q1 2026 system sales
RMB322.9M
Down 14.2% vs Q1 2025
Net new store closures
21 stores
Q1 2026 net closures across MTO and non-MTO formats
Loyalty members
35.9M
As of Mar 31, 2026; 42.9% year-over-year growth
Operating loss
RMB72.3M
Q1 2026 operating loss vs RMB85.3M in Q1 2025
Net loss
RMB109.3M
Q1 2026 net loss vs RMB58.9M in Q1 2025
Adjusted net loss
RMB65.6M
Q1 2026 adjusted net loss vs RMB69.4M in Q1 2025
New convertible notes
US$55.0M
Additional senior secured convertible notes definitive agreement with THRI
$1.8300
Last Close
Volume
Volume 736 is far below 20-day average of 5,892, suggesting limited pre-news positioning.
low
Technical
Shares at 1.795 are below the 200-day MA 2.28 and 44.8% under the 52-week high.
Sector peers showed mixed moves (e.g., GENK +6.25%, TWNP -25.16%), while THCH was down 1.91% with low volume. No clear, coordinated restaurant-sector reaction around this print.
| Date | Event | Sentiment | Move | Catalyst |
|---|---|---|---|---|
| Apr 14 |
Q4 & FY25 earnings |
Negative |
-4.2% |
Q4 and full-year 2025 revenue declines with large operating and net losses. |
| Dec 09 |
Q3 2025 earnings |
Positive |
-4.2% |
Q3 2025 system sales growth and loyalty gains despite modest revenue decline. |
| Aug 26 |
Q2 2025 earnings |
Positive |
+3.6% |
Q2 2025 system sales growth, positive adjusted EBITDA, and loyalty expansion. |
| Jun 24 |
Q1 2025 earnings |
Positive |
+2.5% |
Q1 2025 store margin improvement and loyalty growth despite revenue decline. |
| Apr 15 |
Q4 2024 earnings |
Positive |
+11.7% |
Q4 2024 margin gains and strong store and franchise expansion with loyalty growth. |
Earnings releases often bring volatile but generally modest one-day moves, with mostly negative reactions when losses or revenue declines are emphasized.
Recent earnings for Tims China have combined revenue pressure with expansion of its store base and loyalty program. Prior reports showed total revenues declining while system sales and registered members grew, and losses remained sizable. Market reactions were mixed: some quarters with operational improvements drew positive moves, while others with widening losses or revenue declines saw selling. Today’s Q1 2026 release continues themes of revenue contraction, store-base pruning, and strong loyalty growth, fitting into this pattern of operational reshaping under financial strain.
+1.9%
Average Historical Move
earnings
Past earnings updates for THCH produced an average one-day move of 1.9%, with market focus on balancing revenue trends against losses and loyalty growth.
Across recent earnings, Tims China has shown recurring revenue pressure but consistent expansion of its loyalty base and shifts in store mix. The company has moved from heavy net openings toward pruning underperforming units while using non-GAAP metrics like adjusted Corporate EBITDA and store contribution to track efficiency. Q1 2026 extends this arc, emphasizing closures, cost controls, and loyalty growth against larger net and operating losses.
$30,000,000
registered capacity
An effective Form F-3 shelf filed on 2026-03-27 registers up to 82,107,312 ordinary shares and a total shelf amount of $30,000,000, plus resales by selling shareholders. The company reports no usage of this shelf so far, leaving full capacity available for potential future equity or mixed-securities offerings.
This announcement highlights a challenging Q1 2026, with total revenues down 14.6% and system sales down 14.2%, while net loss widened to RMB109.3M and net store closures reached 21. At the same time, registered loyalty members rose to 35.9M, up 42.9% year over year, and adjusted net loss improved modestly. Investors may track progress on store pruning, same-store sales, and use of the effective $30,000,000 shelf and planned US$55.0M convertible financing when assessing future quarters.
system sales
financial
“System sales1 of RMB322.9 million (USD46.8 million), representing a 14.2% decrease…”
System sales are the total sales generated across an entire network of a business’s outlets, including both company-owned and independently operated (franchise) locations. Investors watch this figure because it shows the brand’s overall customer demand and growth beyond what the company records on its own books—like checking the total harvest from all farms using a seed brand rather than just the seed maker’s own field.
same-store sales growth
financial
“a 12.4% decline in same-store sales growth for company owned and operated stores…”
Same-store sales growth measures how much revenue changes at outlets that have been open for a comparable period (typically a year), excluding sales from newly opened or recently closed locations. It matters to investors because it shows whether demand is growing at the business’s existing operations — like checking whether established trees are producing more fruit rather than counting fruit from newly planted trees — and helps separate true organic performance from growth driven by expansion or closures.
company owned and operated store contribution
financial
“Company owned and operated store contribution2, previously reported as adjusted store EBITDA…”
Company owned and operated store contribution is the portion of a business’s revenue and profit that comes directly from retail locations the company itself owns and runs, rather than from franchised or licensed outlets. For investors it shows how well the company performs when it controls pricing, staffing and customer experience—like judging a restaurant by its corporate-run branches rather than franchises—and helps assess cash flow reliability, capital needs and growth quality.
company owned and operated store contribution margin
financial
“Company owned and operated store contribution margin3, previously reported as adjusted store EBITDA margin…”
A company owned and operated store contribution margin measures how much money a retailer keeps from sales at its own stores after paying costs that change with each sale (like the product cost, transaction fees, and sales commissions), but before paying fixed expenses (rent, corporate salaries, utilities). Think of it as the cash left from each store to help cover monthly bills and create profit; investors use it to see which stores are truly profitable and how new or closed stores will affect overall earnings.
adjusted corporate EBITDA
financial
“Adjusted Corporate EBITDA was a loss of RMB30.1 million (USD4.4 million)…”
Adjusted corporate EBITDA measures a company’s recurring operating profit by starting with earnings before interest, taxes, depreciation and amortization (EBITDA) and then removing one-time, irregular or non-operational items so the figure reflects normal business performance. Investors use it like a cleaned-up snapshot of cash-generating ability—similar to judging a car’s usual fuel efficiency after excluding a single unusually long trip—to compare companies, assess sustainable earnings and gauge capacity to service debt or support valuation.
adjusted net loss
financial
“Adjusted net loss, which excludes: (i) share-based compensation expenses…”
Adjusted net loss is the company’s reported net loss after removing one-time, non-cash, or unusual items that management says obscure underlying results, such as restructuring charges, asset write-downs, or stock-based pay. Investors use it to focus on the business’s core profitability — like smoothing out potholes to judge road quality — but should be cautious because choices about what to exclude can make performance look better than it really is.
convertible notes
financial
“issuance of up to US$55.0 million additional senior secured convertible notes…”
Convertible notes are a type of short-term loan that a company receives from investors, which can later be turned into company shares instead of being paid back in cash. They matter to investors because they offer a way to support a company early on while giving the potential to own a stake in its success if the company grows and later raises more funding.
AI-generated analysis. Not financial advice.
35.9 Million Registered Loyalty Club Members at Quarter-End,
Representing
SHANGHAI and NEW YORK, June 09, 2026 (GLOBE NEWSWIRE) — TH International Limited (Nasdaq: THCH), the parent company of the exclusive master franchisees of Tim Hortons coffee shops in China (“Tims China” or the “Company”) today announced its unaudited financial results for the first quarter 2026.
FIRST QUARTER 2026 HIGHLIGHTS
- Total revenues of RMB256.7 million (USD37.2 million), representing a
14.6% decrease from the same quarter of 2025.
- System sales1 of RMB322.9 million (USD46.8 million), representing a
14.2% decrease from the same quarter of 2025.
- Net new store closures totaled 21 (a net closure of 5 made-to-order (“MTO”) stores and a net closure of 16 non-MTO stores, of which 7 were Tims Express stores).
- Company owned and operated store contribution2, previously reported as adjusted store EBITDA, was RMB3.7 million (USD0.5 million), compared to RMB17.2 million in the same quarter of 2025.
- Company owned and operated store contribution margin3, previously reported as adjusted store EBITDA margin, was
1.8% , compared to6.7% in the same quarter of 2025.
- Registered loyalty club members totaled 35.9 million members as of March 31, 2026, representing a
42.9% year-over-year growth.
__________________________________
1 System sales is calculated as the gross merchandise value of sales generated from both company owned and operated stores and franchised stores.
2 Company owned and operated store contribution, is calculated as fully burdened gross profit4 of company owned and operated stores excluding depreciation & amortization.
3 Company owned and operated store contribution margin, is calculated as company owned and operated store contribution as a percentage of revenues from company owned and operated stores.
4 Fully burdened gross profit of company owned and operated stores, the most directly comparable GAAP measure to company owned and operated store contribution, was a loss of RMB17.9 million (USD2.6 million) for the three months ended March 31, 2026, compared to a loss of RMB11.2 million in the same quarter of 2025.
COMPANY MANAGEMENT STATEMENT
Mr. Yongchen Lu, CEO & Director of Tims China, stated, “In the first quarter, we continued our strategic adjustment to prune underperforming stores, and we expect to complete this process and resume net new store openings starting from the second quarter of 2026. Our sub-franchise businesses maintained steady contribution to cash flows and profitability. Other revenues increased by
Mr. Dong (Albert) Li, CFO of Tims China, commented, “We are pleased to enter into a definitive agreement with THRI for the issuance of up to US
FIRST QUARTER 2026 FINANCIAL RESULTS
Total revenues were RMB256.7 million (USD37.2 million) for the three months ended March 31, 2026, representing a decrease of
- Revenues from Company owned and operated stores were RMB207.2 million (USD30.0 million) for the three months ended March 31, 2026, representing a decrease of
18.7% from RMB254.8 million in the same quarter of 2025. The decrease was primarily attributable to closures of certain underperforming stores as the number of company owned and operated stores decreased from 569 as of March 31, 2025 to 541 as of March 31, 2026, and a12.4% decline in same-store sales growth for company owned and operated stores in the first quarter of 2026. The decrease was also attributable to a7.5% year-over-year decrease in average ticket size, and an11.2% decrease in the number of orders from 8.9 million in the first quarter of 2025 to 7.9 million in the same quarter of 2026.
- Other revenues were RMB49.5 million (USD7.2 million) for the three months ended March 31, 2026, representing an increase of
7.7% from RMB46.0 million in the same quarter of 2025. The increase was primarily due to the expansion of our franchise business as the number of our franchised stores increased from 455 as of March 31, 2025 to 485 as of March 31, 2026.
Company owned and operated store costs and expenses were RMB218.0 million (USD31.6 million) for the three months ended March 31, 2026, representing a decrease of
- Food and packaging costs were RMB58.9 million (USD8.5 million) for the three months ended March 31, 2026, representing a decrease of
23.9% from RMB77.5 million in the same quarter of 2025, which was in line with the revenue trend. As we continued to benefit from higher efficiencies in supply chains and cost reduction on raw materials, logistic and warehousing expenses, food and packaging costs as a percentage of revenues from company owned and operated stores decreased by 2.0 percentage points from30.4% in the first quarter of 2025 to28.4% in the same quarter of 2026.
- Rental and property management fees were RMB47.2 million (USD6.8 million) for the three months ended March 31, 2026, representing a decrease of
16.2% from RMB56.3 million in the same quarter of 2025, which was in line with the revenue trend as the number of our company-owned and operated stores decreased from 569 as of March 31, 2025 to 541 as of March 31, 2026. Rental and property management fees as a percentage of revenues from company owned and operated stores increased by 0.7 percentage points from22.1% in the first quarter of 2025 to22.8% in the same quarter of 2026.
- Payroll and employee benefits expenses were RMB44.8 million (USD6.5 million) for the three months ended March 31, 2026, representing a decrease of
10.4% from RMB50.0 million in the same quarter of 2025, which was in line with the revenue trend. Payroll and employee benefits expenses as a percentage of revenues from company owned and operated stores increased by 2.0 percentage points from19.6% in the first quarter of 2025 to21.6% in the same quarter of 2026.
- Delivery costs were RMB27.3 million (USD4.0 million) for the three months ended March 31, 2026, representing an increase of
1.0% from RMB27.0 million in the same quarter of 2025, which was in line with the8.9% increase in delivery orders from 4.5 million in the first quarter of 2025 to 4.9 million in the same quarter of 2026, partially offset by a reduction in average delivery costs per order. Delivery costs as a percentage of revenues from company owned and operated stores increased by 2.6 percentage points to13.2% in the first quarter of 2026, compared to10.6% in the same quarter of 2025, which was primarily due to delivery revenue as a percentage of revenues from company owned and operated stores increased from53.1% in Q1 2025 to65.1% in Q1 2026.
- Other operating expenses were RMB18.2 million (USD2.6 million) for the three months ended March 31, 2026, representing an increase of
0.9% from RMB18.0 million in the same quarter of 2025. Other operating expenses as a percentage of revenues from company owned and operated stores increased by 1.7 percentage points to8.8% in the first quarter of 2026, compared to7.1% in the same quarter of 2025.
- Store depreciation and amortization expenses were RMB21.6 million (USD3.1 million) for the three months ended March 31, 2026, representing a decrease of
23.9% from RMB28.4 million in the same quarter of 2025, which was primarily due to impairment on property and equipment in relation to company owned and operated store closures and the reduced capital expenditures per store as a result of our initiatives to improve store unit economics. Store depreciation and amortization as a percentage of revenues from company owned and operated stores decreased by 0.7 percentage points to10.4% in the first quarter of 2026, compared to11.1% in the same quarter of 2025.
Costs of other revenues were RMB33.0 million (USD4.8 million) for the three months ended March 31, 2026, representing an increase of
Marketing expenses were RMB9.8 million (USD1.4 million) for the three months ended March 31, 2026, representing a decrease of
General and administrative expenses were RMB48.0 million (USD7.0 million) for the three months ended March 31, 2026, representing a decrease of
Franchise and royalty expenses were RMB13.5 million (USD2.0 million) for the three months ended March 31, 2026, representing a decrease of
Impairment losses of long-lived assets were RMB5.9 million (USD0.9 million) for the three months ended March 31, 2026, compared to RMB11.6 million in the same quarter of 2025, which was primarily due to a decrease in the number of planned closures of underperforming company owned and operated stores.
As a result of the foregoing, operating loss was RMB72.3 million (USD10.5 million) for the three months ended March 31, 2026, compared to RMB85.3 million in the same quarter of 2025.
Adjusted Corporate EBITDA was a loss of RMB30.1 million (USD4.4 million) for the three months ended March 31, 2026, compared to a loss of RMB29.3 million in the same quarter of 2025. Adjusted Corporate EBITDA margin was negative
Changes in fair value of convertible notes were a loss of RMB32.6 million (USD4.7 million) for the three months ended March 31, 2026, compared to a gain of RMB29.5 million in the same quarter of 2025.
Net loss was RMB109.3 million (USD15.8 million) for the three months ended March 31, 2026, compared to RMB58.9 million for the same quarter of 2025. Adjusted net loss, which excludes: (i) share-based compensation expenses of RMB1.5 million (USD0.2 million); (ii) impairment losses of long-lived assets of RMB5.9 million (USD0.9 million), (iii) impairment losses of rental deposits of RMB3.1 million (USD0.5 million), (iv) loss on disposal of property and equipment of RMB0.6 million (USD0.1 million), and (v) loss from changes in fair value of convertible notes of RMB32.6 million (USD4.7 million), was RMB65.6 million (USD9.5 million) for the three months ended March 31, 2026, compared to RMB69.4 million for the same quarter of 2025. Adjusted net loss margin was negative
Basic and diluted loss per ordinary share was RMB3.38 (USD0.49) in the first quarter of 2026, compared to RMB1.78 in the same quarter of 2025. Adjusted basic and diluted net loss per ordinary share was RMB2.04 (USD0.30) in the first quarter of 2026, compared to RMB2.10 in the same quarter of 2025.
Liquidity
As of March 31, 2026, the Company’s total cash and cash equivalents, restricted cash and time deposits were RMB111.4 million (USD16.2 million), compared to RMB129.7 million as of December 31, 2025. The change was primarily attributable to cash disbursements on business operations, partially offset by the draw-down of additional bank borrowings.
KEY OPERATING DATA
| Tims only | For the three months ended or as of | |||||||||||||
| （Exclude the discontinued business) | Mar 31, | Jun 30, | Sep 30, | Dec 31, | Mar 31, | |||||||||
| 2025 | 2025 | 2025 | 2025 | 2026 | ||||||||||
| Total stores | 1,024 | 1,015 | 1,030 | 1,047 | 1,026 | |||||||||
| Company owned and operated stores | 569 | 566 | 551 | 562 | 541 | |||||||||
| Franchised stores | 455 | 449 | 479 | 485 | 485 | |||||||||
| Made to order (MTO) stores | 652 | 692 | 730 | 770 | 765 | |||||||||
| Non-MTO stores | 372 | 323 | 300 | 277 | 261 | |||||||||
| Same-store sales growth for system-wide stores | -7.8 | % | -4.8 | % | 1.3 | % | -2.4 | % | -13.2 | % | ||||
| Same-store sales growth for company owned and operated stores | -6.5 | % | -3.6 | % | 3.3 | % | -1.4 | % | -12.4 | % | ||||
| Registered loyalty club members (in thousands) | 25,150 | 26,192 | 27,900 | 31,021 | 35,930 | |||||||||
| Company owned and operated store contribution (Renminbi in thousands) | 17,154 | 27,176 | 21,786 | 9,164 | 3,730 | |||||||||
| Company owned and operated store contribution margin | 6.7 | % | 9.6 | % | 7.7 | % | 3.7 | % | 1.8 | % | ||||
KEY DEFINITIONS
- Same-store sales growth. The percentage change in the sales of stores that have been operating for 12 months or longer during a certain period compared to the same period from the prior year. The same-store sales growth for any period of more than a month equals to the arithmetic average of the same-store sales growth of each month covered in the period. If a store was closed for seven days or more during any given month, its sales during that month and the same month in the comparison period are excluded for purposes of measuring same-store sales growth.
- Net new store closures. The number of stores permanently closed during the period minus the gross number of new stores opened during the period.
- System sales. Gross merchandise value of sales generated from both company owned and operated stores and franchised stores.
- Company owned and operated store contribution (previously reported as adjusted store EBITDA). Calculated as fully burdened gross profit of company owned and operated stores excluding depreciation and amortization.
- Company owned and operated store contribution margin (previously reported as adjusted store EBITDA margin). Calculated as company owned and operated store contribution as a percentage of revenues from company owned and operated stores.
- Adjusted general and administrative expenses. Calculated as general and administrative expenses excluding share-based compensation expenses, professional fees related to financing programs, and impairment losses of rental deposits.
- Adjusted corporate EBITDA. Calculated as operating loss excluding certain non-cash expenses consisting of depreciation and amortization, share-based compensation expenses, impairment losses of long-lived assets, loss on disposal of property and equipment, professional fees related to financing programs, and impairment losses of rental deposits.
- Adjusted corporate EBITDA margin. Calculated as adjusted corporate EBITDA as a percentage of total revenues.
- Adjusted net loss. Calculated as net loss excluding share-based compensation expenses, impairment losses of long-lived assets, loss on disposal of property and equipment, professional fees related to financing programs, impairment losses of rental deposits, and changes in fair value of convertible notes.
- Adjusted net loss margin. Calculated as adjusted net loss as a percentage of total revenues.
- Adjusted basic and diluted net loss per ordinary share. Calculated as adjusted net loss attributable to the Company’s ordinary shareholders divided by weighted-average number of basic and diluted ordinary shares.
USE OF NON-GAAP FINANCIAL MEASURES
The Company uses non-GAAP financial measures, namely company owned and operated store contribution, company owned and operated store contribution margin, adjusted general and administrative expenses, adjusted corporate EBITDA, adjusted corporate EBITDA margin, adjusted net loss, adjusted net loss margin, and adjusted basic and diluted net loss per ordinary share in evaluating its operating results and for financial and operational decision-making purposes. The Company defines (i) company owned and operated store contribution as fully burdened gross profit of company owned and operated stores excluding depreciation and amortization; (ii) company owned and operated store contribution margin as company owned and operated store contribution as a percentage of revenues from company owned and operated stores; (iii) adjusted general and administrative expenses as general and administrative expenses excluding share-based compensation expenses, professional fees related to financing programs, and impairment losses of rental deposits; (iv) adjusted corporate EBITDA as operating loss excluding certain non-cash expenses consisting of depreciation and amortization, share-based compensation expenses, impairment losses of long-lived assets, loss on disposal of property and equipment, professional fees related to financing programs, and impairment losses of rental deposits; (v) adjusted corporate EBITDA margin as adjusted corporate EBITDA as a percentage of total revenues; (vi) adjusted net loss as net loss excluding share-based compensation expenses, impairment losses of long-lived assets, loss on disposal of property and equipment, professional fees related to financing programs, impairment losses of rental deposits, and changes in fair value of convertible notes; (vii) adjusted net loss margin as adjusted net loss as a percentage of total revenues; and (viii) adjusted basic and diluted net loss per ordinary share as adjusted net loss attributable to the Company’s ordinary shareholders divided by weighted-average number of basic and diluted ordinary share. The Company believes company owned and operated store contribution, company owned and operated store contribution margin, adjusted general and administrative expenses, adjusted corporate EBITDA, adjusted corporate EBITDA margin, adjusted net loss, adjusted net loss margin, and adjusted basic and diluted net loss per ordinary share enhance investors’ overall understanding of its financial performance and allow for greater visibility with respect to key metrics used by its management in its financial and operational decision-making.
These non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. As these non-GAAP financial measures have limitations as analytical tools and may not be calculated in the same manner by all companies, they may not be comparable to other similarly titled measures used by other companies. The Company compensates for these limitations by reconciling the non-GAAP financial measures to the nearest U.S. GAAP performance measures, which should be considered when evaluating the Company’s performance. For reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures, please see the section of the accompanying tables titled, “Reconciliation of Non-GAAP Measures to the Most Directly Comparable GAAP Measures.” The Company encourages investors and others to review its financial information in its entirety and not rely on any single financial measure.
EXCHANGE RATE INFORMATION
This earnings release contains translations of certain RMB amounts into U.S. dollars (“USD”) at specified rates solely for the convenience of the reader. Unless otherwise stated, all translations from RMB to USD were made at the rate of RMB6.8980 to USD1.00, the exchange rate in effect on March 31, 2026 set forth in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB or USD amounts referred could be converted into USD or RMB, as the case may be, at any rate or at all.
CONFERENCE CALL
The Company will hold a conference call today, on Tuesday, June 9, 2026, at 8:00 am Eastern Time (on Tuesday, June 9, 2026, at 8:00 pm Beijing Time) to discuss the financial results.
Participants are strongly encouraged to pre-register for the conference call, by using the weblink provided below.
https://register-conf.media-server.com/register/BI87efb84978714709b23f062bc05715df
Participants may also view the live webcast by registering through below weblink:
https://edge.media-server.com/mmc/p/h28sz2td
The webcast features a ‘Submit Your Question’ tab at the top, where you will have the opportunity to submit your questions before and during the call.
A live and archived webcast of the conference call will also be available at the Company’s Investor Relations website at https://ir.timschina.com under “Events and Presentations”.
FORWARD-LOOKING STATEMENTS
Certain statements in this earnings release may be considered forward-looking statements within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995, such as the Company’s ability to further grow its business and store network, optimize its cost structure, improve its operational efficiency, and achieve profitable growth. Forward-looking statements are statements that are not historical facts and generally relate to future events or the Company’s future financial or other performance metrics. In some cases, you can identify forward-looking statements by terminology such as “believe,” “may,” “will,” “potentially,” “estimate,” “continue,” “anticipate,” “intend,” “could,” “would,” “project,” “target,” “plan,” “expect,” or the negatives of these terms or variations of them or similar terminology. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ materially from those expressed or implied by such forward looking statements. New risks and uncertainties may emerge from time to time, and it is not possible to predict all risks and uncertainties. These forward-looking statements are based upon estimates and assumptions that, while considered reasonable by the Company and its management, as the case may be, are inherently uncertain and subject to material change. Factors that may cause actual results to differ materially from current expectations include various factors beyond management’s control, including, but not limited to, general economic conditions and other risks, uncertainties and factors set forth in the sections entitled “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements” in the Company’s Annual Report on Form 20-F, and other filings it makes with the Securities and Exchange Commission. Nothing in this communication should be regarded as a representation by any person that the forward-looking statements set forth herein will be achieved or that any of the contemplated results of such forward-looking statements will be achieved. You should not place undue reliance on forward-looking statements in this communication, which speak only as of the date they are made and are qualified in their entirety by reference to the cautionary statements herein. Except as required by law, the Company expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company’s expectations with respect thereto or any change in events, conditions, or circumstances on which any statement is based.
ABOUT TH INTERNATIONAL LIMITED
TH International Limited (Nasdaq: THCH) (“Tims China”) is the parent company of the exclusive master franchisees of Tim Hortons coffee shops in mainland China, Hong Kong and Macau.
The Company’s philosophy is rooted in world-class execution and data-driven decision making and centered around true local relevance, continuous innovation, genuine community, and absolute convenience. For more information, please visit https://www.timschina.com.
IMPORTANT NOTICE REGARDING THE TIM HORTONS® BRAND
The TIM HORTONS® brand and related trademarks is used by Tims China pursuant to a franchise agreement with Tim Hortons Restaurants International GmbH and its affiliates (collectively, the “Identified Persons”). The Identified Persons are entities entirely separate and distinct from Tims China and its subsidiaries (the “Group”). No Identified Persons exercises any control over the business, operations, finances or management of the Group, and no Identified Person is responsible for any obligations or liabilities of the Group.
INVESTOR AND MEDIA CONTACTS
Investor Relations
Public and Media Relations
Patty Yu
Patty.Yu@timschina.com
| TH INTERNATIONAL LIMITED AND SUBSIDIARIES | |||||||||
| UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||
| (Amounts in thousands of RMB and US$, except for number of shares) | |||||||||
| As of | |||||||||
| December 31, 2025 | March 31, 2026 | ||||||||
| RMB | RMB | US$ | |||||||
| ASSETS | |||||||||
| Current assets: | |||||||||
| Cash and cash equivalents | 121,795 | 104,792 | 15,192 | ||||||
| Restricted Cash | 7,916 | 6,615 | 959 | ||||||
| Amount due from related parties | 195 | 195 | 28 | ||||||
| Accounts receivable, net | 17,692 | 15,387 | 2,231 | ||||||
| Inventories | 36,793 | 33,272 | 4,823 | ||||||
| Prepaid expenses and other current assets | 142,235 | 124,398 | 18,034 | ||||||
| Total current assets | 326,626 | 284,659 | 41,267 | ||||||
| Non-current assets: | |||||||||
| Property and equipment, net | 332,070 | 308,650 | 44,745 | ||||||
| Intangible assets, net | 81,014 | 76,676 | 11,116 | ||||||
| Operating lease right-of-use assets | 348,916 | 289,635 | 41,988 | ||||||
| Other non-current assets | 88,051 | 97,760 | 14,172 | ||||||
| Total non-current assets | 850,051 | 772,721 | 112,021 | ||||||
| Total assets | 1,176,677 | 1,057,380 | 153,288 | ||||||
| LIABILITIES AND SHAREHOLDERS’EQUITY | |||||||||
| Current liabilities: | |||||||||
| Bank borrowings, current | 395,088 | 413,263 | 59,911 | ||||||
| Accounts payable | 199,152 | 188,173 | 27,279 | ||||||
| Contract liabilities | 37,197 | 33,189 | 4,811 | ||||||
| Amount due to related parties | 17,414 | 32,697 | 4,740 | ||||||
| Operating lease liabilities | 180,806 | 173,721 | 25,184 | ||||||
| Other current liabilities | 172,605 | 166,205 | 24,095 | ||||||
| Total current liabilities | 1,002,262 | 1,007,248 | 146,020 | ||||||
| Non-current liabilities: | |||||||||
| Convertible notes, at fair value | 1,152,723 | 1,167,303 | 169,223 | ||||||
| Contract liabilities | 10,133 | 9,437 | 1,368 | ||||||
| Operating lease liabilities | 240,282 | 192,048 | 27,841 | ||||||
| Other non-current liabilities | 7,712 | 7,181 | 1,042 | ||||||
| Total non-current liabilities | 1,410,850 | 1,375,969 | 199,474 | ||||||
| Total liabilities | 2,413,112 | 2,383,217 | 345,494 | ||||||
| Shareholders’ equity: | |||||||||
| Ordinary shares | 10 | 10 | 1 | ||||||
| Additional paid-in capital | 1,821,605 | 1,823,408 | 264,339 | ||||||
| Accumulated losses | (3,102,994 | ) | (3,212,890 | ) | (465,771 | ) | |||
| Accumulated other comprehensive income | 38,393 | 56,463 | 8,185 | ||||||
| Treasury shares | – | – | – | ||||||
| Total deficit attributable to shareholders of the Company | (1,242,986 | ) | (1,333,009 | ) | (193,246 | ) | |||
| Non-controlling interests | 6,551 | 7,172 | 1,040 | ||||||
| Total shareholders’ deficit | (1,236,435 | ) | (1,325,837 | ) | (192,206 | ) | |||
| Commitments and Contingencies | – | – | – | ||||||
| Total liabilities and shareholders’ deficit | 1,176,677 | 1,057,380 | 153,288 | ||||||
| TH INTERNATIONAL LIMITED AND SUBSIDIARIES | |||||||||
| UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME/(LOSS) | |||||||||
| (Amounts in thousands of RMB and US$, except for per share data) | |||||||||
| For the three months ended March 31, | |||||||||
| 2025 | 2026 | ||||||||
| RMB | RMB | US$ | |||||||
| Revenues: | |||||||||
| Company owned and operated stores | 254,759 | 207,216 | 30,040 | ||||||
| Other revenues | 45,983 | 49,525 | 7,180 | ||||||
| Total revenues | 300,742 | 256,741 | 37,220 | ||||||
| Costs and expenses, net: | |||||||||
| Company owned and operated stores | |||||||||
| Food and packaging | 77,472 | 58,932 | 8,543 | ||||||
| Rental and property management fee | 56,295 | 47,199 | 6,842 | ||||||
| Payroll and employee benefits | 50,020 | 44,818 | 6,497 | ||||||
| Delivery costs | 27,041 | 27,323 | 3,962 | ||||||
| Other operating expenses | 18,018 | 18,180 | 2,636 | ||||||
| Store depreciation and amortization | 28,358 | 21,586 | 3,129 | ||||||
| Company owned and operated store costs and expenses | 257,204 | 218,038 | 31,609 | ||||||
| Costs of other revenues | 31,526 | 33,048 | 4,791 | ||||||
| Marketing expenses | 17,429 | 9,809 | 1,422 | ||||||
| General and administrative expenses | 51,810 | 48,044 | 6,966 | ||||||
| Franchise and royalty expenses | 13,896 | 13,535 | 1,962 | ||||||
| Other operating costs and expenses | 1,115 | 559 | 81 | ||||||
| Loss on disposal of property and equipment | 2,733 | 612 | 89 | ||||||
| Impairment losses of long-lived assets | 11,618 | 5,887 | 853 | ||||||
| Other income | 1,286 | 516 | 75 | ||||||
| Total costs and expenses, net | 386,045 | 329,016 | 47,698 | ||||||
| Operating loss | (85,303 | ) | (72,275 | ) | (10,478 | ) | |||
| Interest income | 100 | 400 | 58 | ||||||
| Interest expenses | (3,576 | ) | (3,954 | ) | (573 | ) | |||
| Foreign currency transaction gain/(loss) | 380 | (844 | ) | (123 | ) | ||||
| Changes in fair value of convertible notes | 29,458 | (32,602 | ) | (4,726 | ) | ||||
| Loss before income taxes | (58,941 | ) | (109,275 | ) | (15,842 | ) | |||
| Income tax expenses | – | – | – | ||||||
| Net loss | (58,941 | ) | (109,275 | ) | (15,842 | ) | |||
| Less: Net (loss)/income attributable to non-controlling interests | (920 | ) | 621 | 90 | |||||
| Net loss attributable to shareholders of the Company | (58,021 | ) | (109,896 | ) | (15,932 | ) | |||
| Basic and diluted loss per Ordinary Share | (1.78 | ) | (3.38 | ) | (0.49 | ) | |||
| Net loss | (58,941 | ) | (109,275 | ) | (15,842 | ) | |||
| Other comprehensive income/(loss) | |||||||||
| Fair value changes of convertible notes due to instrument-specific credit risk, net of nil income taxes | 430 | – | – | ||||||
| Foreign currency translation adjustment, net of nil income taxes | 817 | 18,070 | 2,620 | ||||||
| Total comprehensive loss | (57,694 | ) | (91,205 | ) | (13,222 | ) | |||
| Less: Comprehensive (loss)/income attributable to non-controlling interests | (920 | ) | 621 | 90 | |||||
| Comprehensive loss attributable to shareholders of the Company | (56,774 | ) | (91,826 | ) | (13,312 | ) | |||
| TH INTERNATIONAL LIMITED AND SUBSIDIARIES | |||||||||
| UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||
| (Amounts in thousands of RMB and US$) | |||||||||
| For the three months ended March 31, | |||||||||
| 2025 | 2026 | ||||||||
| RMB | RMB | US$ | |||||||
| Net cash used in operating activities | (219 | ) | (23,544 | ) | (3,413 | ) | |||
| Net cash used in investing activities | (16,658 | ) | (11,472 | ) | (1,663 | ) | |||
| Net cash provided by financing activities | 44,213 | 18,421 | 2,670 | ||||||
| Effect of foreign currency exchange rate changes on cash | (137 | ) | (1,709 | ) | (247 | ) | |||
| Net increase/(decrease) in cash | 27,199 | (18,304 | ) | (2,653 | ) | ||||
| Cash and cash equivalents and restricted cash, at beginning of the period | 184,237 | 129,711 | 18,804 | ||||||
| Cash and cash equivalents and restricted cash, at end of the period | 211,436 | 111,407 | 16,151 | ||||||
| TH INTERNATIONAL LIMITED AND SUBSIDIARIES | |||||||||||||||
| RECONCILIATION OF NON-GAAP MEASURES TO THE MOST DIRECTLY COMPARABLE GAAP MEASURES | |||||||||||||||
| (Unaudited, amounts in thousands of RMB and US$, except for number of shares and per share data) | |||||||||||||||
| A. Company owned and operated store contribution | |||||||||||||||
| For the three months ended March 31, | |||||||||||||||
| 2025 | 2026 | ||||||||||||||
| RMB | % of Revenues – company owned and operated stores | RMB | US$ | % of Revenues – company owned and operated stores | |||||||||||
| Revenues – company owned and operated stores | 254,759 | 100.0 | 207,216 | 30,040 | 100.0 | ||||||||||
| Food and packaging costs – company owned and operated stores | (77,472 | ) | (30.4 | ) | (58,932 | ) | (8,543 | ) | (28.4 | ) | |||||
| Rental expenses – company owned and operated stores | (56,295 | ) | (22.1 | ) | (47,199 | ) | (6,842 | ) | (22.8 | ) | |||||
| Payroll and employee benefits – company owned and operated stores | (50,020 | ) | (19.6 | ) | (44,818 | ) | (6,497 | ) | (21.6 | ) | |||||
| Delivery costs – company owned and operated stores | (27,041 | ) | (10.6 | ) | (27,323 | ) | (3,962 | ) | (13.2 | ) | |||||
| Other operating expenses – company owned and operated stores | (18,018 | ) | (7.1 | ) | (18,180 | ) | (2,636 | ) | (8.8 | ) | |||||
| Store depreciation and amortization | (28,358 | ) | (11.1 | ) | (21,586 | ) | (3,129 | ) | (10.4 | ) | |||||
| Franchise and royalty expenses – company owned and operated stores | (8,759 | ) | (3.5 | ) | (7,034 | ) | (1,020 | ) | (3.4 | ) | |||||
| Fully-burdened gross (loss) profit – company owned and operated stores | (11,204 | ) | (4.4 | ) | (17,856 | ) | (2,589 | ) | (8.6 | ) | |||||
| Store depreciation and amortization | 28,358 | 11.1 | 21,586 | 3,129 | 10.4 | ||||||||||
| Company owned and operated store contribution | 17,154 | 6.7 | 3,730 | 540 | 1.8 | ||||||||||
| Company owned and operated store contribution margin | 6.7 | % | 6.7 | % | 1.8 | % | 1.8 | % | 1.8 | % | |||||
| B. Adjusted general and administrative expenses | |||||||||||||||
| For the three months ended March 31, | |||||||||||||||
| 2025 | 2026 | ||||||||||||||
| RMB | % of Total Revenues | RMB | US$ | % of Total Revenues | |||||||||||
| General and administrative expenses | (51,810 | ) | (17.3 | ) | (48,044 | ) | (6,966 | ) | (18.7 | ) | |||||
| Adjusted for: | |||||||||||||||
| Share-based compensation expenses | 1,076 | 0.4 | 1,516 | 220 | 0.6 | ||||||||||
| Professional fees related to financing programs | 1,007 | 0.3 | – | – | 0.0 | ||||||||||
| Impairment losses of rental deposits | 2,561 | 0.9 | 3,093 | 448 | 1.2 | ||||||||||
| Adjusted General and administrative expenses | (47,166 | ) | (15.7 | ) | (43,435 | ) | (6,298 | ) | (16.9 | ) | |||||
| C. Adjusted corporate EBITDA and adjusted corporate EBITDA margin | |||||||||||||||
| For the three months ended March 31, | |||||||||||||||
| 2025 | 2026 | ||||||||||||||
| RMB | % of Total Revenues | RMB | US$ | % of Total Revenues | |||||||||||
| Operating loss | (85,303 | ) | (28.5 | ) | (72,275 | ) | (10,478 | ) | (28.2 | ) | |||||
| Adjusted for: | |||||||||||||||
| Depreciation and amortization | 37,013 | 12.3 | 31,042 | 4,500 | 12.1 | ||||||||||
| Share-based compensation expenses | 1,076 | 0.4 | 1,516 | 220 | 0.6 | ||||||||||
| Impairment losses of rental deposits | 2,561 | 0.9 | 3,093 | 448 | 1.2 | ||||||||||
| Professional fees related to financing programs | 1,007 | 0.3 | – | – | 0.0 | ||||||||||
| Impairment losses of long-lived assets | 11,618 | 3.9 | 5,887 | 853 | 2.3 | ||||||||||
| Loss on disposal of property and equipment | 2,733 | 0.9 | 612 | 89 | 0.2 | ||||||||||
| Adjusted Corporate EBITDA | (29,295 | ) | (9.8 | ) | (30,125 | ) | (4,368 | ) | (11.8 | ) | |||||
| D. Adjusted net loss and adjusted net loss margin | |||||||||||||||
| For the three months ended March 31, | |||||||||||||||
| 2025 | 2026 | ||||||||||||||
| RMB | % of Total Revenues | RMB | US$ | % of Total Revenues | |||||||||||
| Net loss | (58,941 | ) | (19.6 | ) | (109,275 | ) | (15,842 | ) | (42.6 | ) | |||||
| Adjusted for: | |||||||||||||||
| Share-based compensation expenses | 1,076 | 0.4 | 1,516 | 220 | 0.6 | ||||||||||
| Professional fees related to financing programs | 1,007 | 0.3 | – | – | 0.0 | ||||||||||
| Impairment losses of long-lived assets | 11,618 | 3.9 | 5,887 | 853 | 2.3 | ||||||||||
| Impairment losses of rental deposits | 2,561 | 0.9 | 3,093 | 448 | 1.2 | ||||||||||
| Loss on disposal of property and equipment | 2,733 | 0.9 | 612 | 89 | 0.2 | ||||||||||
| Changes in fair value of convertible notes | (29,458 | ) | (9.8 | ) | 32,602 | 4,726 | 12.7 | ||||||||
| Adjusted Net loss | (69,404 | ) | (23.0 | ) | (65,565 | ) | (9,506 | ) | (25.6 | ) | |||||
| E. Adjusted basic and diluted net loss per Ordinary Share | |||||||||||||||
| For the three months ended March 31, | |||||||||||||||
| 2025 | 2026 | ||||||||||||||
| RMB | Unadjusted and Adjusted Basic and diluted loss per Ordinary Share RMB |
RMB | US$ | Unadjusted and Adjusted Basic and diluted loss per Ordinary Share USD |
|||||||||||
| Net loss attributable to shareholders of the Company | (58,021 | ) | (1.78 | ) | (109,896 | ) | (15,932 | ) | (0.49 | ) | |||||
| Adjusted for: | |||||||||||||||
| Share-based compensation expenses | 1,076 | 0.03 | 1,516 | 220 | 0.01 | ||||||||||
| Professional fees related to financing programs | 1,007 | 0.03 | – | – | – | ||||||||||
| Impairment losses of long-lived assets | 11,618 | 0.36 | 5,887 | 853 | 0.03 | ||||||||||
| Impairment losses of rental deposits | 2,561 | 0.08 | 3,093 | 448 | 0.01 | ||||||||||
| Loss on disposal of property and equipment | 2,733 | 0.08 | 612 | 89 | 0.00 | ||||||||||
| Changes in fair value of convertible notes | (29,458 | ) | (0.90 | ) | 32,602 | 4,726 | 0.14 | ||||||||
| Adjusted Net loss attributable to shareholders of the Company | (68,484 | ) | (2.10 | ) | (66,186 | ) | (9,596 | ) | (0.30 | ) | |||||
| Weighted average shares outstanding used in calculating basic and diluted loss per share | 32,540,189 | N/A | 32,519,377 | 32,519,377 | N/A | ||||||||||
| Adjusted basic and diluted net loss per Ordinary Share | (2.10 | ) | (2.04 | ) | (0.30 | ) | |||||||||
FAQ
How did Tims China (THCH) perform financially in Q1 2026?
Tims China reported lower revenue and a larger net loss in Q1 2026. According to Tims China, total revenues fell 14.6% year-over-year to RMB256.7 million and net loss increased to RMB109.3 million, compared with RMB58.9 million a year earlier.
What were Tims China (THCH) Q1 2026 same-store sales trends?
Same-store sales declined across the Tims China system in Q1 2026. According to Tims China, system-wide same-store sales growth was -13.2%, while company owned and operated stores recorded -12.4%, reflecting weaker underlying demand compared with the same quarter of 2025.
How many loyalty members did Tims China (THCH) have at March 31, 2026?
Tims China reported strong growth in its loyalty program membership. According to Tims China, registered loyalty club members reached 35.9 million as of March 31, 2026, representing 42.9% year-over-year growth and providing a larger customer base for future marketing and sales initiatives.
What store network changes did Tims China (THCH) make in Q1 2026?
Tims China reduced its total store count during Q1 2026. According to Tims China, net new store closures totaled 21, bringing total stores to 1,026, with 541 company owned and operated stores and 485 franchised stores as of March 31, 2026.
What was Tims China (THCH) store contribution margin in Q1 2026?
Store contribution margin declined for company stores in Q1 2026. According to Tims China, company owned and operated store contribution was RMB3.7 million with a 1.8% margin, down from RMB17.2 million and a 6.7% margin in the first quarter of 2025.
What new financing agreement did Tims China (THCH) announce in June 2026?
Tims China entered a definitive financing agreement involving convertible notes. According to Tims China, it agreed with THRI on the issuance of up to US$55.0 million additional senior secured convertible notes to support nationwide store network expansion and strengthen the company’s balance sheet.
