Tims Good China (THCH.US) released its financial report: Q3 achieved a revenue of 436 million yuan, and the EBITDA profit margin of self-operated stores improved to 7.5% after adjustments.

On the evening of November 15th, Tim Hortons China, a globally renowned coffee chain, and Popeyes China, a fried chicken brand (referred to as "Tims China" or NASDAQ: THCH), released their third-quarter financial report for 2023. The report showed that the company's total revenue reached 436.4 million yuan, a year-on-year increase of 42.7%, setting a new record for quarterly revenue since going public. The revenue for the first three quarters was 1.185 billion yuan, exceeding last year's total revenue of 1.011 billion yuan. At the same time, Tims China's profitability continued to improve, with an adjusted EBITDA of 29.31 million yuan at the store level, which has been positive for five consecutive quarters. The adjusted EBITDA profit margin at the store level was 7.5%, reaching a new quarterly high. During the reporting period, Tims China continued to promote precision store expansion and the Coffee Plus strategy, effectively driving the continuous expansion of its store network and user base. According to the financial report, as of September 30, 2023, the number of stores nationwide reached 763, covering 56 cities, with a total of 16.87 million registered brand members. Industry analysis believes that the Chinese coffee industry is currently in a period of strategic opportunities for high-speed growth, and the competition in the industry is becoming increasingly fierce, but the development pattern is far from fully formed. In the face of industry opportunities, Tims China's "high-quality products and attractive price points" and the differentiation of "coffee + hot food" continue to release competitive advantages. At the same time, with the strong development of Popeyes China, Tims China's diversified and multi-brand catering format has been initially established, and is expected to unleash greater development potential in the future. Q3 achieved revenue of 436 million yuan, reaching a new quarterly high According to the financial report, Tims China achieved strong growth in the third quarter, with impressive core performance data. In terms of store operation results, Tims China achieved revenue of 436.4 million yuan in Q3, with a year-on-year and quarter-on-quarter increase, setting the highest single-quarter revenue record since going public. The revenue for the first three quarters was 1.185 billion yuan, a 66.9% increase compared to the same period last year, and exceeding the total revenue of 1.011 billion yuan for the entire year of 2022. At the same time, Tims China continued its rapid expansion in store layout. According to the financial report, Tims China opened 63 new stores in Q3, with a focus on "attacking cities" and "innovation" in store selection. Specifically, Tims China opened its first stores in several markets, including Changchun, Jilin, Shenyang, Liaoning, Lanzhou, Gansu, Yantai, Shandong, Handan, Hebei, Taizhou, Jiangsu, etc., further improving the national store network layout and expanding its coverage to lower-tier cities. During this period, Tims China also opened its first temple-themed coffee shop, Tims West Temple Store, and its first classical garden store, Yangzhou Slender West Lake Garden Maple Store. These two specialty stores incorporate Chinese traditional architectural aesthetics and local cultural characteristics, blending classical elegance with the aroma of coffee, providing a refreshing experience. In addition, in terms of franchised stores, Tims China officially launched the "Partner Project" and opened its first Tims GO (Maple Store) store franchise in Beijing and Shanghai. The industry believes that the "Partner Project," combined with "city franchising" and "KA franchising," is expected to accelerate Tims China's store expansion in the fourth quarter. It is expected that the first batch of individual franchise stores will open by the end of this year. Benefiting from the improvement in store operation efficiency and the continuous expansion of scale, Tims China's profitability has entered a growth "positive cycle." The adjusted EBITDA at the store level reached 29.31 million yuan, positive for five consecutive quarters. The adjusted EBITDA profit margin at the store level was 7.5%, reaching a new quarterly high. In-depth consumer insights driving product innovation In the face of increasingly fierce competition in the domestic coffee industry, Tims China has always been committed to understanding consumer preferences and needs, enriching product innovation, and marketing strategies that resonate with the trends among young people. To respond to consumer demands, Tims China once again upgraded its "coffee + hot food" strategy and launched the "Tims Freshly Brewed Bagel Festival." With the slogan "Listen to you, alright," the festival upgraded the bagel mascot to highlight its fun and humorous attributes, meeting the needs and preferences of young consumers with distinctive personalities. After successfully penetrating consumers' minds with the breakfast bagel series, Tims China extended their hot food offerings to lunchtime, introducing a value meal featuring bagel burgers starting from 29.9 yuan, which continued to increase lunchtime sales at stores. According to the financial report, the proportion of orders including food increased from 43.8% in Q3 2022 to 54.5% in Q3 2023. In terms of new products, Tims China recognized the young consumer group's affinity for Chinese-style wellness and seasonal ingredients, and launched a series of new products inspired by these preferences. Among them, the star product "Moonlit Green Pomelo Infusion" combines fresh and plump pomelos to provide a refreshing surprise to the taste buds. "Bamboo Orange Melody Infusion" combines the fragrance of bamboo leaves and the sweetness of oranges, paired with the unique acidity of medium-roast coffee, creating a refreshing experience like "rain in the mountains." In addition, during the osmanthus flowering season, Tims China launched the "Popular Osmanthus" themed new products. Once the Golden Osmanthus Oolong Latte and Golden Osmanthus Oat Latte were launched, they quickly gained popularity on platforms such as TikTok and Xiaohongshu, and were loved by consumers. At the same time, Tims China's strict control over healthy eating and food safety has been recognized by the industry and consumers, and it won the "CHINA FOODS Healthy Seven Star Award for Best Newcomer of the Year." Since the third quarter, Tims China has also won the love and recognition of consumers through various innovative collaboration activities. By partnering with "Shangmeiying," Tims China produced advertisements such as "Peach of the Great Sage" and "Ink Latte," perfectly combining the summer new products of Peach Peach Buffalo Latte and Oolong Buffalo Latte with traditional paper-cut animation. Tims China also collaborated with a2 to bring two special a2 Source MilkTM blends, paired with imported a2 fresh milk from Australia, allowing even delicate stomachs to enjoy a flavorful experience.Enjoying coffee.At the same time, Tims Tim Hortons China focuses on enhancing brand value, practicing social welfare, and conveying brand warmth. On Tencent's 99 Philanthropy Day, Tims Tim Hortons China partnered with the True Love Dreams charity organization to launch the "Go Far" project. Through the "Go Far" experiential learning trip, it helps children step out of the school gates, explore the vast unknown world independently, and contribute to paving the way for their future, contributing to Tims Tim Hortons China's efforts. Thanks to the successful execution of its product strategy and the continuous enhancement of its brand power, Tims Tim Hortons China has gained more and more attention and love from young people, and its member base continues to expand, with increased consumer conversion power, further promoting sales growth. According to financial reports, Tims Tim Hortons China had 16.87 million registered members in the third quarter, and same-store sales continued to grow strongly. Popeyes continues to open 7 stores with strong momentum Since the opening of its first Popeyes fried chicken restaurant in August, it has quickly gained the favor of a large number of consumers with its newly upgraded product development, store design, customer service, and interesting experiences. Subsequently, Tims Tim Hortons China followed the market demand and expanded rapidly. As of November 15, 2023, Popeyes has opened 7 stores in China, with average daily turnover exceeding 29,000 yuan. It is reported that all Popeyes fried chicken restaurants opened so far are in Shanghai, and their expansion strategy follows Tims Tim Hortons China's approach: enter a city and concentrate on layout to speed up density accumulation. In the short term, targeting first and second-tier cities to establish a foothold, and in the long term, expanding into the sinking market to tap into larger potential growth space. In terms of brand operation, Tims Tim Hortons China has collaborated with Popeyes China. On Halloween this year, they launched the "Tims x Popeyes | 20% Discount on 'Devil's Claw' Fried Chicken" promotion, achieving mutual empowerment and linkage between the two major brands. In response, Lu Yongchen, the CEO of Tims Tim Hortons China, stated that the company will manage both brands carefully and build Tims Tim Hortons China into a diversified multi-brand restaurant group. In the future, Tims Tim Hortons China will closely cooperate and develop together with Popeyes China, supporting and empowering each other in terms of industrial chain, supply chain, and digital operations, and striving to become a well-loved restaurant brand by consumers. Regarding future development, Lu Yongchen said, "In the third quarter of 2023, driven by the opening of new stores and strong growth in same-store sales, we achieved a year-on-year growth of 42.7%, setting a record of revenue exceeding 400 million yuan for two consecutive quarters. This is a recognition of the company's development strategy and operational tactics by the market. In future market competition, Tims Tim Hortons China will continue to strengthen its brand competitive advantage, improve product innovation and operational capabilities, and further enhance Tims Tim Hortons China's brand influence and profitability."