HDL — SUPER HI INTERNATIONAL HOLDING Ltd. American Depositary Shares

Summary of HDL Q1 2026 Earnings Call

1. Key Financial Results and Metrics

• Total Revenue: RMB 226 million, up 14.2% year-over-year.
• Haidilao Restaurant Revenue: RMB 204 million, an increase of 8.4% year-over-year.
• Same-store Sales Growth: 4% year-over-year.
• Operating Profit: RMB 13.993 million, a 7.7% increase, with an operating margin rising to 6.2%.
• Customer Traffic: Over 8.1 million visits, with an average table turnover rate of 4 turns per day, up 0.1 from last year.
• Other Businesses Revenue: Increased by 166.7%, contributing significantly to revenue diversification.
• Operating Cash Flow: RMB 24.24 million, a 23.1% increase year-over-year.
• Cash Reserves: RMB 240 million, down from RMB 270 million at the end of 2025 due to expansion investments.

2. Strategic Updates and Business Highlights

• Store Expansion: Operated 127 restaurants overseas, with a net increase of 4 stores year-over-year. Focused on quality and location accuracy for new openings.
• Menu Innovation: Introduced targeted offerings such as kids' meal sets and premium beef options, enhancing customer experience and driving sales.
• Red Pomegranate Project: Expanded to 10 brands with 18 stores, focusing on localized market adaptations and prototype store incubation.
• Employee Engagement: Continued emphasis on employee training and operational flexibility to improve service quality and customer satisfaction.

3. Forward Guidance and Outlook

• The company aims to maintain its long-term goal of becoming a leading global integrated catering group, with a focus on enhancing customer experience, operational efficiency, and business diversification.
• Management remains committed to balancing short-term profitability with long-term growth, emphasizing quality in operations and customer service.

4. Bad News, Challenges, or Points of Concern

• Foreign Exchange Impact: Notable fluctuations in net profit due to foreign exchange losses, which could affect overall profitability.
• Regional Performance Variability: North America experienced flat customer growth due to adverse weather and new store ramp-up phases, while other regions showed mixed performance.
• Cost Pressures: Rising oil prices and raw material costs pose challenges, although management believes they can control the impact through supply chain optimization and product mix adjustments.

5. Notable Q&A Insights

• Management Transition: The departure of a key executive is not expected to alter the company's strategic focus on customer and employee benefits.
• Consumer Trends: A shift towards more rational and value-conscious consumer behavior has been observed, with varying preferences across regions.
• Member Management: Membership growth remains strong, with 9.05 million members contributing significantly to sales, and plans to enhance the membership experience through digitalization and tailored benefits.
• Store Opening Plans: Future openings will be driven by local managers based on market conditions, with a pipeline of double-digit stores in various stages of development.

Overall, HDL's Q1 2026 results reflect solid growth and strategic initiatives, but the company faces challenges from foreign exchange fluctuations and regional performance variability. Management's focus on quality and customer experience remains a priority as they navigate these headwinds.