TH International reported a deepening loss per share and a notable decline in sales in its latest quarterly results. The company posted losses of $(0.25) per share, compared to losses of $(0.17) per share in the same period last year, marking a 47.06% deterioration YoY. Sales also contracted, falling 17.29% YoY to $40.291 million from $48.715 million in the prior-year quarter.

Q2 financial performance

The following table summarises TH International's key financial metrics for the quarter against the prior-year comparable period.

Both the per-share loss and total sales figures reflect a weaker performance relative to the year-ago quarter. The loss per share widened from $(0.17) to $(0.25), while sales declined by more than $8 million on a YoY basis.

TH International Limited (NASDAQ: THCH) reported a 14.6% decrease in total revenues to RMB256.7 million for the first quarter ended March 31, 2026, while narrowing its net loss to RMB109.3 million compared to RMB58.9 million in the prior year. The company is shifting its strategy from expansion to improving store quality, with plans to resume net new store openings starting from the second quarter of 2026. To support this transition, TH International entered into a definitive agreement for up to $55 million in additional senior secured convertible notes with its brand owner, THRI.

Financial Performance

System sales fell 14.2% year-over-year to RMB322.9 million, driven by a strategic adjustment to prune underperforming stores and a 13.2% decline in same-store sales. Company owned and operated store contribution was RMB3.7 million, down from RMB17.2 million in the prior year, with a contribution margin of 1.8%. Cost optimization measures reduced food and packaging costs by 2.0 percentage points to 28.4% of revenues, while marketing expenses decreased 43.7% to RMB9.8 million. Adjusted corporate EBITDA margin was negative 11.8%.

Operational Metrics

Net new store closures totaled 21 in the first quarter, bringing total stores to 1,026 as of March 31, 2026. Franchised stores increased to 485 from 455 in the prior year, contributing to a 7.7% year-over-year increase in other revenues to RMB49.5 million. The company reported strong performance from 2024 and 2025 vintage stores, with contribution margins in the mid-teens to high teens, particularly in tier-one cities and special channels like railway stations.

Registered loyalty club members grew 42.9% to 35.9 million, with nearly 50% of transacting members under the age of 30. The company received over 10,500 applications for its individual franchise business since its launch in December 2023, successfully opening nearly 260 stores by the end of March 2026. Effective June 15, 2026, Yongchen Lu will transition to the role of Chairman, with Zhong Chen appointed as the new CEO.