Key Points – TH International reported weaker Q1 2026 results, with revenue down 14.6% year over year and same-store sales down 13.2% as it continued closing underperforming stores and cut back on discount-driven promotions. – Management is shifting focus toward franchising and…
ofitability, with more than 10,500 franchise applications received, over 440 stores signed, and nearly 260 franchise locations opened by the end of March. – Costs improved in some areas, but margins stayed under pressure: food and packaging costs fell, marketing spending dropped sharply, yet adjusted corporate EBITDA margin remained negative 11.8%; the company expects same-store sales to improve later in the year. TH International (NASDAQ:THCH), the operator of Tims China, reported weaker first-quarter 2026 sales as management continued to close underperforming stores, reduce discount-driven promotions and shift resources toward franchising and profitability
On the company’s earnings call, CEO Director Yongchen Lu said the coffee industry entered a seasonal slowdown in the quarter and that Tims China “proactively optimized its operating rhythm” by moderating promotions and reallocating resources toward franchise development and long-term profitability. Lu said the strategy put pressure on short-term revenue indicators but aligned with the company’s transition “from prioritizing scale growth to prioritizing quality growth.” Sales decline as store pruning continues Tims China said total revenue fell 14.6% year over year in the first quarter, while system sales declined 14.2%. CFO Albert Li said the declines were primarily due to the closure of certain underperforming company-owned and operated stores and lower same-store sales.
Lu said systemwide same-store sales fell 13.2% in the quarter, driven by an 8.3% decline in comparable transactions and a 4.8% decline in average comparable ticket size. He attributed part of the weakness to delivery aggregators significantly reducing subsidies, as…