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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