The following is a summary of the TH International Limited (THCH) Q3 2024 Earnings Call Transcript:

Financial Performance:

• TH International maintained adjusted corporate EBITDA profitability in Q3 2024.

• Achieved highest-ever quarterly company-owned and operated store contribution margin of 13.3%.

• Adjusted corporate EBITDA profitability was reached during the second quarter of 2024 and continued into Q3.

• Monthly average transacting customers increased by 2.4% year-over-year, reaching 3.3 million.

• Digital orders as a percentage of total orders increased to 86.6% in Q3 2024 from 82.6% in Q3 2023.

• Reduced food and packaging costs as well as labor and operating expenses as a percentage of revenues from company-operated stores year-over-year.

Business Progress:

• Expanded product offerings to include low-sugar, high-fiber, and plum-based options, emphasizing freshness and nutrition.

• Renovated 539 store locations for made-to-order service, creating efficient, fresh, and transparent food preparation environments for customers, boosting perceived brand value and utility.

• Launched the Chibaobao Cards, which sold over 120,000 units in Q3, effectively leveraging sales strategies to increase customer purchase frequency.

• Reached 22.8 million registered Loyalty Club Members, a 35.3% year-over-year increase, fostering significant customer engagement and retention.

• Introduced 10 new beverages and 9 new food items, focusing on health-friendly options.

Opportunities:

• Emphasized freshly prepared, healthy, and high-quality product offerings tied to affordable pricing strategies to appeal to broader markets and ensure competitive differentiation.

Risks:

• Still navigating challenges from ongoing price competition in the Chinese coffee market.

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