TH International 2025 Q1 Earnings Misses Targets with Net Income Loss Narrowed by 58.7%

TH International (THCH) reported its fiscal 2025 Q1 earnings on Jun 24th, 2025. The company fell short of analyst expectations, with revenue at $254.76 million compared to the anticipated $49.28 million. The adjusted guidance also missed targets, with the projected EPS remaining at -1.78. Despite these misses, the leadership remains committed to strategic growth initiatives and operational efficiencies to improve future earnings.

Revenue
TH International's total revenue experienced a decline of 14.0%, settling at $254.76 million for 2025 Q1, down from $296.38 million in 2024 Q1. The company-owned and operated stores contributed $254.76 million, while other revenue streams added $45.98 million, culminating in a total revenue figure of $300.74 million.

Earnings/Net Income
TH International reduced its losses significantly, reporting a decrease to $1.78 per share from a loss of $4.48 per share in the previous year's Q1, marking a 60.3% improvement. The net loss was narrowed to $-58.94 million in 2025 Q1, a 58.7% reduction from the $-142.83 million net loss in 2024 Q1. The company demonstrated a positive trajectory, although continued losses indicate ongoing challenges in achieving profitability.

Price Action
The stock price of TH International has edged down 2.41% during the latest trading day, has climbed 3.28% during the most recent full trading week, and has jumped 12.30% month-to-date.

Post-Earnings Price Action Review
A strategy of purchasing TH International (THCH) shares following a quarter-over-quarter revenue decline on the day of financial report release and holding for 30 days resulted in significant underperformance. This approach yielded a compound annual growth rate (CAGR) of -55.36%, with an overall return of -88.73% and an excess return of -150.67%. The strategy faced a substantial maximum drawdown of -92.35% and registered a Sharpe ratio of -0.67, indicating a challenging risk-return profile. These metrics suggest that the approach has been ineffective, highlighting the volatility and risk associated with investing in TH International shares under these circumstances.

CEO Commentary
TH International CEO emphasized the company’s commitment to leveraging its unique brand positioning within the competitive landscape of the coffee industry in China. He highlighted that despite facing challenges in the current market environment, innovative product offerings and enhanced customer experiences have been key growth drivers. Strategic investments in technology and infrastructure are prioritized to optimize operations and expand market reach. The CEO maintained an optimistic outlook, expressing confidence in the company's ability to navigate challenges and capitalize on growth opportunities moving forward.

Guidance
For the upcoming quarter, TH International expects to achieve revenue of approximately $254.76 million and projects an EPS of -1.78. The leadership team guides to continued investment in brand development and operational efficiency, aiming to improve profitability and enhance customer loyalty in a competitive market. The company remains focused on strategic growth initiatives to drive long-term value for stakeholders.

Additional News
In recent developments, TH International Limited announced a key partnership with Oatly Group AB to introduce a Ready-to-Drink Oatmilk Latte, expanding its product offerings in China's competitive beverage market. Additionally, the company participated in a nationwide "Weight Management Year" campaign, launching Hot & Healthy Power Bowls to cater to health-conscious consumers. Furthermore, TH International delayed its 20-F filing, which could affect investor confidence and regulatory compliance. These initiatives reflect the company's ongoing efforts to diversify its product range and address market demands.