Atour's Q2 2025 Earnings Call: Contradictions Emerge in Hotel Expansion, Retail Growth Targets, and Profit Margin Guidance

The above is the analysis of the conflicting points in this earnings call

Date of Call: August 26, 2025

Financials Results

• Revenue: RMB 2,469M, up 37.4% YOY and 29.5% QOQ
• Gross Margin: Hotel GM 38.3%, up from 35.7% in prior year; Retail GM 53.3%, up from 50.6% in prior year

Guidance:

- FY2025 total net revenues expected to grow ~30% vs FY2024.- Retail business revenue growth guided to ~60% YOY for FY2025.- 2025 hotel openings target ~500; total portfolio to reach ~2,000 by year-end.- Expected hotel closures for 2025: 70–80.- Q3 RevPAR pressure expected to ease vs Q2; full-year RevPAR recovery rate improving.- Effective tax rate expected ~30% in 2025 (vs ~25% in 2024); full-year net profit margin to decline YOY.

Business Commentary:

Revenue Performance and Growth:* - Atour Lifestyle Holdings reported net revenues of RMB 2,469 million for Q2 2025, growing by 37.4% year-over-year and 29.5% quarter-over-quarter. - The growth was driven by the expansion of the hotel network and strong performance in the retail business.

• Hotel Business Trends:
• The company's RevPAR was RMB 343 in Q2 2025, representing 95.7% of its level in the same period of 2024.

• The recovery in RevPAR was attributed to steady demand recovery and the company's focus on product innovation and iteration across hotel and retail businesses.

• Retail Business Success:

• Atour's retail business achieved GMV of RMB 1,144 million in Q2 2025, rising 84.6% year-over-year.

• This success was driven by ongoing strong sales of new products, effective product innovation, and a focus on addressing core customer needs.

• Membership and Channel Development:

• By the end of Q2 2025, Atour had 102 million registered individual members, representing a 34.7% year-over-year increase.
• The growth in membership was due to the refinement of the ACARD membership system and expansion of member benefits.
  

  Sentiment Analysis:

  • Net revenues grew 37.4% YOY to RMB 2,469M; retail GMV rose 84.6% YOY to RMB 1,144M; adjusted EBITDA up 37.7% YOY with margin stable at 24.7%. Management guided FY2025 revenue +30% and retail +60%, with ~500 openings and ~2,000 hotels by year-end. RevPAR in Q2 was 95.7% of 2024, with Q3 pressure expected to ease. Net profit margin will decline due to tax rate rising to ~30%.

  Q&A:

  • Question from Wei Ling (Citigroup): Could you share Q3-to-date RevPAR trends, summer performance, and your latest full-year RevPAR outlook?
  • Response: Q3 RevPAR pressure should ease versus Q2, with the YOY RevPAR decline narrowing and full-year recovery gradually improving; focus remains on balancing OCC and ADR to optimize profitability.
  • Question from Xin Chen (UBS): Any changes to 2025 hotel opening/closure guidance and franchise signings amid rising competition?
  • Response: Still targeting ~500 openings in 2025 and ~2,000 hotels by year-end; expect 70–80 closures; signings remain disciplined and quality-first to ensure high-standard growth.
  • Question from Sijie Lin (CICC): What is the full-year revenue guidance for retail and the roadmap for new products and potential bottlenecks?
  • Response: Raised retail revenue growth guidance to ~60% YOY; continuing product iterations (e.g., Pro 3.0 pillow, Pro 2.0 comforter) and focusing on supply chain, R&D, and quality control amid intensifying competition.
  • Question from Dan Chee (Morgan Stanley): Can adjusted net income margin stay near 18% given retail mix shift and higher tax rate?
  • Response: Full-year net profit margin will decline YOY due to a higher effective tax rate (~30% vs ~25%) and mix shift, despite relatively stable pretax margins from efficiency gains.
  • Question from K. Y. Cheung (Goldman Sachs): Updates on SAVHE expansion focus and Atour Light (v3.3) feedback and targets?
  • Response: SAVHE will expand selectively with quality-first (Shenzhen flagship RevPAR > RMB 800 in first month); Atour Light 3.3 shows strong signing momentum with a long-term goal of ~1,000 hotels.