TH International 2025 Q3 Earnings Losses Narrow 15.6% Despite Revenue Decline

TH International reported mixed results for Q3 2025, with a 5.5% revenue decline but improved profitability compared to the prior year. The company reduced its net loss by 15.6% to $73.76 million and narrowed per-share losses to $2.24 from $2.75. While these improvements indicate progress, sustained losses over four years and negative price action highlight ongoing challenges.

Revenue

Total revenue for TH International fell to $282.88 million in Q3 2025, a 5.5% decline from $299.45 million in the same period last year. Revenue from company-owned and operated stores accounted for the entirety of the $282.88 million, while other revenue streams, including franchise and royalty income, contributed $75.13 million. Combined, these segments generated total revenues of $358.02 million. The drop in core store revenue reflects planned closures of underperforming locations, though other revenue growth offset part of the decline.

Earnings/Net Income

TH International reduced its net loss to $73.76 million in Q3 2025, a 15.6% improvement from $87.39 million in 2024 Q3. Earnings per share also improved, narrowing losses to $2.24 from $2.75. While the reduction in losses is positive, the company remains unprofitable, having recorded losses in the same quarter for four consecutive years. The EPS improvement reflects cost management efforts but does not signal long-term profitability.

Price Action

The stock price of TH International has shown consistent downward pressure, declining 1.36% in the latest trading day, 4.51% for the week, and 5.58% month-to-date. This aligns with broader investor caution amid the company’s ongoing financial struggles.

Post-Earnings Price Action Review

The strategy of buying TH International shares on revenue raise announcements and holding for 30 days yielded mixed results over three years. With a 50% success rate and an average return of -6.90%, the approach lacked consistency. A 14.29% peak return in the first year contrasted with a -18.18% trough in the third year, underscoring the strategy’s volatility. Investors seeking stable returns may find this approach unreliable.

CEO Commentary

Yongchen Lu, CEO, emphasized Tims China’s 12.8% year-over-year system sales growth and 3.3% same-store sales increase for company-owned stores. He highlighted the success of the “Light & Fit Lunch Box” platform and the expansion into 91 cities. However, Albert Li, CFO, acknowledged margin pressures from rising food, packaging, and delivery costs, as well as competitive challenges in the tea beverage sector.

Additional News

In October 2025, TH International completed a $89.9 million senior secured convertible note issuance, restructuring $2026 liabilities and extending $2027 notes to 2029. This move aims to stabilize liquidity and fund store expansion. Concurrently, the company launched an eco-friendly straw in collaboration with Tencent’s CarbonXmade program, promoting sustainability in key markets. Additionally, Tims China expanded its store network to 91 cities, reflecting geographic growth despite operational challenges.

Guidance

The company did not provide formal guidance for future periods but expressed confidence in improving self-sustainability through store expansion and operational efficiency. Management plans to secure additional financing to support growth initiatives.