TH International Limited reported fourth‑quarter 2025 revenue of $44.1 million, a 7.3% decline from the $45.6 million recorded in Q4 2024. The drop reflects a broader slowdown in overall sales, driven by the closure of under‑performing company‑owned stores and a modest contraction in the domestic coffee market. The company’s revenue decline is larger than the 2.6% figure originally reported, aligning with the official earnings data.
System sales – the revenue generated by the company’s franchised and company‑owned outlets – actually increased 4.0% year‑over‑year to $51.4 million. The rise in system sales offsets the headline revenue decline and signals that the core store network is gaining traction. The growth is supported by the expansion of the franchised store base, which now totals 1,047 locations across 92 cities, and by a 29% increase in registered loyalty members to 31 million.
Net loss from continuing operations for the quarter was $32.5 million, or $0.34 per share on an adjusted basis. The loss reflects higher operating expenses and the impact of one‑time restructuring charges, but it is substantially lower than the $227.2 million loss reported in the same quarter of 2024. The company’s adjusted net loss margin of –24.7% indicates that while profitability remains negative, the margin has improved compared with the prior year’s –30.5% margin.
Management highlighted the company’s resilience amid macro‑economic volatility and intense local competition. “Our team demonstrated strong resilience and achieved profitability improvement through enhanced operational efficiencies, supply‑chain optimizations, and rigorous cost controls,” the CEO said. The company also noted that “the 2025 year marks a critical transition, with a 7.6% increase in total system sales and a 25 net new store opening.” These comments underscore a strategic shift toward an asset‑light franchise model and a focus on high‑margin food‑plus‑coffee offerings.
Investors reacted positively, with the stock rising 6.4% on the day of the release. The market’s enthusiasm was driven by the company’s margin expansion – adjusted corporate EBITDA margin improved by 3.3 percentage points year‑over‑year – and the 4% growth in system sales, which suggests underlying demand strength. The franchise expansion and loyalty program growth also contributed to the upbeat reaction, as they provide a scalable, low‑capital growth engine for the business.
Headwinds remain, including macro‑economic uncertainty, aggressive pricing from local competitors, and higher delivery costs from aggregator platforms. However, the company’s tailwinds – a growing franchised network, a robust loyalty base, and a shift toward a food‑led mix – position it to navigate short‑term challenges while pursuing long‑term growth. The earnings release signals that TH International is executing a disciplined cost strategy while expanding its store footprint, a combination that should influence long‑term valuation models.
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