Chagee Holdings Limited reported a 4.5% year-over-year revenue increase to RMB 3,546 million for the first quarter of 2026, driven by operational efficiency and a 19.2% sequential growth. The company achieved a non-GAAP net income of RMB 506.7 million, representing a non-GAAP net margin of 14.3%, while its global teahouse network expanded to 7,531 locations. To signal confidence in its long-term growth and undervaluation, the Board approved a share repurchase program authorizing the buyback of up to $150 million in American Depositary Shares (ADS) over the next 12 months.

Financial Performance

The company's financial results for Q1 2026 show a recovery in profitability and operational leverage. Total Gross Merchandise Value (GMV) reached RMB 7,917.8 million, an 8.1% increase from the previous quarter. Gross margin improved to 55.6%, up from 53.1% a year ago, supported by increased revenue contribution from company-owned teahouses. Operating income turned around sequentially, with GAAP operating income reaching RMB 547.2 million and non-GAAP operating income hitting RMB 606.2 million.

Operational Highlights

Chagee's strategic focus on consumer value and organizational efficiency yielded tangible results in the first quarter. The company launched 12 new products, including the Dahong Pao series and Caramel Pour Latte, which drove customer engagement and same-store GMV growth. Same-store GMV growth in Greater China improved by 9.4 percentage points sequentially. The total registered member base reached 248 million, with nearly 50 million active members, an increase of over 11% quarter over quarter.

The global teahouse network totaled 7,531 locations at the end of the quarter, comprising 7,157 in Greater China and 374 overseas. The company continues to expand its international footprint, with significant presence in Singapore, Malaysia, and Thailand. Overseas GMV grew 139% year over year and 14.6% sequentially to RMB 426.4 million, highlighting the region's role as a key growth engine.

Strategic Initiatives and Shareholder Returns

Chagee implemented a new GMV-based revenue sharing model for franchise teahouses, which aligns the interests of the company and its franchisees. While this model shifted the revenue mix—increasing the proportion of revenue from franchising services and decreasing product sales—it did not affect overall profitability, as gross margins remained stable.

Management emphasized its commitment to creating long-term shareholder value through disciplined capital allocation. The new $150 million repurchase program follows a period of strategic organizational adjustments that improved execution efficiency and reduced expense ratios. Non-GAAP general and administrative expenses declined to 11.6% of revenue, while non-GAAP sales and marketing expenses dropped to 8.6% of revenue.

Chagee Holdings has filed a shelf registration to offer and sell Class A Ordinary Shares, providing flexibility for future capital raises. The filing allows the company to conduct offerings from time to time, though the total size of the shelf was not disclosed.

Offering Details

The registration permits Chagee Holdings to offer its Class A Ordinary Shares in one or more tranches. This mechanism provides the company with the ability to access capital markets quickly when conditions are favorable without needing to file a new registration for each offering.

Key Features of the Filing

• Security Type: Class A Ordinary Shares
• Frequency: From time to time
• Structure: One or more offerings

The shelf registration does not commit the company to sell any specific amount of shares. Sales will occur at the discretion of the management, subject to market conditions and the company's capital requirements.