TH International 2025 Q3 Earnings 15.6% Reduction in Net Loss Amid Revenue Decline

TH International (THCH) reported fiscal 2025 Q3 earnings on Dec 9, 2025, with total revenue declining 5.5% to $282.88 million year-over-year, while system sales grew 12.8%. The company narrowed its net loss to $73.76 million (-$2.24 EPS), a 15.6% improvement from Q3 2024. CEO Yongchen Lu highlighted strategic initiatives like the Light & Fit Lunch Box platform and sub-franchisee expansion, while CFO Dong Li emphasized liquidity improvements via $89.9 million in convertible notes.

Revenue

Company-owned and operated stores accounted for $282.88 million in revenue, with other revenues contributing $75.13 million, bringing total revenues to $358.02 million. This reflects a 5.5% year-over-year decline in core store revenue, offset by growth in ancillary income streams.

Earnings/Net Income

TH International reduced its net loss to $73.76 million (-$2.24 EPS) in Q3 2025, a 15.6% improvement from $87.39 million (-$2.75 EPS) in Q3 2024. Despite this progress, the company has posted losses for four consecutive years, underscoring persistent financial challenges.

Price Action

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Post-Earnings Price Action Review

Following the earnings release, THCH’s stock price fell 1.36% in a single trading day, declined 4.51% over the subsequent week, and dropped 5.58% month-to-date. The market reaction appears mixed, with investors reacting to the modest loss reduction against ongoing revenue declines and operational headwinds.

CEO Commentary

CEO Yongchen Lu emphasized 12.8% system sales growth and 3.3% same-store sales gains for company-owned stores, alongside a 36.5% food revenue contribution. Strategic initiatives include the Light & Fit Lunch Box platform, celebrity partnerships (e.g., Lars Huang), and summer beverage innovations. Lu also highlighted sub-franchisee expansion into 91 cities and 64 strategic locations, with loyalty members rising 22.3% to 27.9 million. Challenges include competitive pressures and delivery subsidies, though supply chain optimization and pricing adjustments are expected to drive margin expansion.

Guidance

The company aims to expand store contribution margins to mid- to high-teens by 2026 through supply chain optimization and high-margin product launches. Franchised stores in strategic locations (e.g., airports, hospitals) demonstrated mid- to high-teens EBITDA margins and 2-year payback periods. CFO Dong Li reiterated focus on reducing onshore leverage, securing financing, and achieving self-sustaining cash flows.

Additional News

TH International issued $89.9 million in senior secured convertible notes due 2029, repurchasing 2026-variable-rate notes and extending 2024 unsecured notes to 2029. This restructuring eliminated near-term offshore liabilities, allowing operational focus. Additionally, the company launched an eco-friendly straw in collaboration with Tencent’s CarbonXmade program, aligning with sustainability goals. Expansion into 91 cities and 64 strategic locations, including high-speed train stations, underscores its geographic growth strategy.

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