Tims is good China (THCH.US) continues its profitable track in Q3, with the company's adjusted EBITDA turning positive for two consecutive quarters.

On the evening of November 12, the globally renowned chain coffee brand Tim Hortons China (THCH.US) released its third quarter financial report for 2024. The report showed that the company's third quarter operating revenue reached 360 million yuan, with EBITDA adjusted for self-operated stores reaching 39.92 million yuan, a year-on-year increase of 37.6%. The adjusted EBITDA ratio was 13.3%, reaching a historical high for the quarter. At the same time, Tim's Good China's adjusted EBITDA for the third quarter was 2 million yuan, marking two consecutive quarters of profitability, continuing on a path of profit. During the reporting period, Tim's Good China focused on "extreme convenience" as a principle, further opening up single-store franchise opportunities nationwide (excluding special areas). By continuously innovating products and strengthening the "coffee + hot food" differentiated operational characteristics, the company achieved efficient growth in store network and user scale. According to the report, as of September 30, 2024, the total number of stores nationwide reached 946, covering 77 cities, with a total of 22.8 million registered brand members. Industry analysis believes that in the context of intense competition in the Chinese coffee industry, Tim's Good China's focus on differentiated brand positioning has led to continuous improvement in operational efficiency and profitability. Its operating strategy and market approach have withstood market tests, and with the expansion of scale advantages, there is potential for even greater development in the future. Significant improvement in operational efficiency, with self-operated store profit margins reaching new highs Facing increasingly fierce industry competition, Tim's Good China aims for high-quality and sustainable development, focusing on differentiated brand positioning and focusing on dual enhancement of scale and operational efficiency. In terms of store expansion, guided by the principle of "extreme convenience", a combination of self-operation and various franchise strategies has been used to increase store density and meet consumer needs in different scenarios. In the third quarter, Tim's Good China deepened cooperation with franchise partners, opening up single-store franchise opportunities nationwide (excluding special areas), and expanding to cities such as Harbin, Shijiazhuang, Yancheng, Dongying, Heze, and Huangshi. By the end of September 30, 2024, the total number of single-store franchise locations had reached 43, covering 13 provinces. As a result, Tim's Good China has achieved high-quality and steady expansion of its store network. As of September 30, 2024, Tim's Good China had a total of 946 stores nationwide covering 77 cities. It is worth noting that Tim's Good China leverages its brand advantage to empower partner store profitability. Through professional management training, stores are supported in high-quality operations; a nationwide supply chain system provides strong support, ensuring timely supply of fresh materials to stores and continuously improving the quality of "coffee + hot food" products and store service levels. With the accumulated brand influence, high-quality products, and services, new stores in cities quickly gained consumer acceptance and support. For example, the first store in Harbin achieved sales exceeding 100,000 yuan in the first three days of operation. At the same time, Tim's Good China has made significant progress in improving operational efficiency through enhanced supply chain management and digital technology. The third-quarter financial report shows that at the self-operated store level, food and packaging costs decreased from 35.1% to 29.0% year-on-year, labor costs decreased from 19.9% to 16.9%, and other store operating expenses as a percentage decreased from 9.0% to 7.9% year-on-year. At the company headquarters level, marketing expenses as a percentage of total expenses decreased by 2.3 percentage points year-on-year. Adjusted headquarters management expenses decreased by 2.7 percentage points year-on-year. Thanks to the expansion of scale and improved operational efficiency, Tim's Good China's profitability has steadily increased. EBITDA adjusted for self-operated stores reached 39.92 million yuan, a 37.62% year-on-year increase. The adjusted EBITDA ratio at the self-operated store level was 13.3%, reaching a single-quarter historical high. The company's adjusted EBITDA has been positive for two consecutive quarters at the company level, continuing on a profitable trend. Upgrading the brand's new proposition, building a competitive barrier in "coffee + hot food" After five years of deep cultivation in the Chinese market, Tim's Good China has established a unique position in the coffee market with its differentiated focus on "coffee + hot food," continuously gaining consumer love and being known as the "bagel expert" by consumers. Recently, the company announced a new brand proposition "fresh is delicious, healthy and low burden," introducing a new model of "made-to-order handcrafted counters" that prioritizes "freshness" and "health," providing consumers with healthier and higher-quality products and services, further solidifying the brand's leading position in the coffee and hot food sector. At the same time, Tim's Good China continues to engage in creative joint marketing, rapidly increasing user preference and brand influence. According to reports, Tim's TH International Limited recently launched a new model of "made-to-order handcrafted counters," where hot food products are freshly made immediately after customers place their orders; at the same time, it introduced bagel combos with less than 400 calories, providing customers with balanced meals to lighten their calorie burden. In addition, all beverage products promise "5 zeros" - 0 plant fat powder, 0 milk powder, 0 hydrogenated vegetable oil, 0 trans fatty acids, and 0 instant tea powder, coupled with 14.9 yuan and 19.9 yuan high-value combo packages, aiming to provide consumers with a high-quality, high-value, and highly convenient consumption experience. During the period, Tim's TH International Limited hosted the second Bagel Festival, collaborating with "Chief Bagel Recommendation Officer" Monglan, with the theme of "healthy and delicious, bagels freedom," launching five red bagels, five black bagels, seared bacon beef bagel burgers, and Apple Inc. cinnamon lattes. So far, Tim's TH International Limited has created a complete bagel universe, including the healthy and nutritious "grain bagel" series, the delicious and light "smile bagel" series, and the instant recharge.Neng's "bagel burger" line covers all-weather hot food consumption scenes.In addition, TimsTH International Limited has also launched multiple promotions, including the "Cereal Bagel Six Times Card", "Smile Bagel Three Times Card", and a new member offer of 8.8 yuan for the popular Cereal Bagel; there are also exclusive paper bags, bagel packaging boxes, bagel coasters and other peripheral products with the collaboration of Moe Orchid. Thanks to product innovation and the endorsement of Moe Orchid, the 2nd Bagel Festival received a total of 63 million exposures. In September, the search volume for TimsTH International Limited's bagels doubled, significantly improving the brand ranking and sales growth of TimsTH International Limited in the coffee industry. In line with the "Coffee + Warm Food" strategy, the "Eat Full Meal Combo Card" launched by TimsTH International Limited has also achieved great success, selling over 120,000 cards in the third quarter, with an average purchase frequency of cardholders increasing by 4.6 times. Industry analysts believe that Tims Tianhao China's "Coffee + Warm Food" has become an important growth strategy. Based on the "made-to-order" model, more products related to health concepts have been introduced, catering to the growing health demands of Chinese consumers, enhancing brand recognition and user stickiness, and potentially unlocking greater development opportunities. According to financial reports, as of September 30, 2024, the number of registered members reached 22.8 million, an increase of 35.3% year-on-year. The average number of members per store has exceeded 24,000, effectively promoting brand sales growth. Looking ahead, Tims Tianhao China CEO Lu Yongchen said, "In the future, the company's strategic focus is to steadfastly implement the established development plan, continuously adhere to the brand's new proposition of 'fresh and delicious, healthy and affordable', provide high-value health food; at the same time, steadily expand the store network, optimize the supply chain efficiency, bring high-quality, cost-effective, and convenient consumer experience to consumers, enhance brand attractiveness, expand brand scale, improve store profitability, achieve high-profit, efficient capital utilization growth goals."