CHA Q2 2026 Earnings Call Summary

1Key Financial Results and Metrics

Total Revenue: RMB 3,415 million, up 2.5% year-over-year, but down 3.7% quarter-over-quarter.

GAAP Net Income: RMB 465 million, net income margin improved to 13.6% from 2.3% a year ago.

Non-GAAP Net Income: RMB 489 million, with a stable non-GAAP net margin of 14.3%.

Total GMV: RMB 7,660 million, down 3.3% sequentially; Greater China GMV down 4.5%, while overseas GMV increased 18.2% sequentially and 114.3% year-over-year.

Teahouse Network: Expanded to 7,639 locations, net increase of 108 from the previous quarter.

2Strategic Updates and Business Highlights

Product Innovation: Launched 17 new products, including gelato and specialty deals, marking the highest number in a single quarter.

Marketing Initiatives: Strengthened brand engagement through partnerships and cultural collaborations, enhancing emotional connections with consumers.

Operational Efficiency: Non-GAAP G&A expenses decreased to 9.1% of revenues from 13.2% a year ago, reflecting improved resource allocation.

Expansion: Entered the South Korean market with strong initial sales, and continued to grow overseas presence in 8 markets.

3Forward Guidance and Outlook

Management views 2026 as a year of adjustment and stabilization, focusing on building a stronger foundation for sustainable growth rather than rapid expansion.

Positive trends in same-store sales are expected to continue into the second half of the year, with new product launches and improved customer experiences driving performance.

The company remains committed to enhancing shareholder returns, exploring options for regular dividends.

4Challenges and Points of Concern

Competitive Pressures: The tea beverage industry is experiencing intensified competition, with a shift from shared growth to competition over a fixed market base.

Market Volatility: The external environment remains challenging, impacting overall growth and GMV metrics.

Declining Same-Store Sales: Although improvements were noted, same-store sales showed a low single-digit decline in July before expected recovery in August.

5Notable Q&A Insights

Outlook for H2 2026: Management emphasized the importance of high-quality growth and a focus on fundamentals amidst a complex market.

Same-Store Trends: Indications of recovery in same-store sales were noted, with expectations for positive year-over-year growth in August.

Shareholder Returns: The management is actively reviewing options for sustainable shareholder returns, including potential regular dividends, while balancing growth needs and market conditions. Overall, CHA's Q2 2026 results reflect a mix of cautious optimism amidst competitive pressures, with a strategic focus on innovation and operational efficiency to drive future growth.