{"success":true,"data":{"pressRelease":{"id":"121267","rtpr_id":"nGNXbkz1jY","ticker":"THCH","exchange":"NASDAQ","all_tickers":["THCH"],"title":"Tims China Announces Second Quarter 2026 Financial Results","author":"Globe Newswire","published_at":"2026-08-18T09:30:00.562Z","article_body":"SHANGHAI and NEW YORK, Aug. 18, 2026 (GLOBE NEWSWIRE) -- TH International\nLimited (Nasdaq: THCH), the parent company of the exclusive master franchisees\nof Tim Hortons coffee shops in China (“Tims China” or the “Company”),\ntoday announced its unaudited financial results for the second quarter 2026.\n\nSECOND QUARTER 2026 HIGHLIGHTS\n* Total revenues of RMB273.4 million (USD40.3 million), representing\na 21.7% decrease from the same quarter of 2025.\n* System sales(1) of RMB347.8 million (USD51.3 million), representing a 15.1%\ndecrease from the same quarter of 2025.\n* Net new store openings totaled two (a net opening of 15 made-to-order\n(“MTO”) stores and a net closure of 13 non-MTO stores).\n* Company owned and operated store contribution(2), previously reported as\nadjusted store EBITDA, was RMB12.6 million (USD1.9 million), compared to\nRMB27.2 million in the same quarter of 2025.\n* Company owned and operated store contribution margin(3), previously reported\nas adjusted store EBITDA margin, was 5.7%, compared to 9.6% in the same\nquarter of 2025.\n* Registered loyalty club members totaled 37.1 million as of June 30, 2026,\nrepresenting a 41.7% year-over-year growth.\n__________________________________\n\n(1) System sales is calculated as the gross merchandise value of sales\ngenerated from both company owned and operated stores and franchised stores.\n(2) Company owned and operated store contribution, is calculated as fully\nburdened gross profit(4) of company owned and operated stores excluding\ndepreciation & amortization. \n(3) Company owned and operated store contribution margin, is calculated as\ncompany owned and operated store contribution as a percentage of revenues from\ncompany owned and operated stores.\n(4 )Fully burdened gross profit of company owned and operated stores, the most\ndirectly comparable GAAP measure to company owned and operated store\ncontribution, was a loss of RMB7.2 million (USD1.1 million) for the three\nmonths ended June 30, 2026, compared to a gain of RMB0.4 million in the same\nquarter of 2025.\n\nCOMPANY MANAGEMENT STATEMENT\n\nMr. Kwok Wah (John) Cheung, CEO of Tims China, stated, “The second quarter\nwas a period of transition for Tims China. Our top-line results were impacted\nby our proactive decision to close underperforming stores, as well as pressure\non same-store sales as we lapped strong delivery performance from last year.\nIt is clear that we need to make meaningful changes to our strategy to win\nback customers. My experience tells me that when we focus on our core identity\nand consistently deliver great products and a great guest experience, our\ncustomers will respond. I have full confidence in Tims China’s ability to\nimprove the business and regain market share. We have a clear plan and are\nmoving quickly to return the business to growth. We already see green shoots\nin the business when we look at our registered loyalty club membership, which\nreached more than 37.1 million as of June 30, 2026, up 41.7% year over year,\nproviding a strong foundation to deepen customer engagement and support future\ngrowth”.\n\nMr. Dong (Albert) Li, CFO of Tims China, commented, “We successfully closed\nthe initial tranche of US$15.8 million in additional senior secured\nconvertible notes issued to Tim Hortons Restaurants International GmbH\n(“THRI”), our brand owner and founding shareholder, in July 2026. With the\nproceeds from this series of proposed financing, we plan to drive our\ninnovation and product offerings, invest more in marketing activities, and\ndeploy a more balanced store network development strategy by opening both\ncompany owned and operated stores and franchised stores going forward”.\n\nSECOND QUARTER 2026 FINANCIAL RESULTS\n\nTotal revenues were RMB273.4 million (USD40.3 million) for the three months\nended June 30, 2026, representing a decrease of 21.7% from RMB349.0 million in\nthe same quarter of 2025. Total revenues comprise:\n* Revenues from company owned and operated stores were RMB220.9 million\n(USD32.6 million) for the three months ended June 30, 2026, representing a\ndecrease of 21.6% from RMB281.9 million in the same quarter of 2025. The\ndecrease was primarily attributable to closures of certain underperforming\nstores as the number of company owned and operated stores decreased from 566\nas of June 30, 2025 to 544 as of June 30, 2026, and a 17.3% decline in\nsame-store sales growth for company owned and operated stores in the second\nquarter of 2026. The decrease was also attributable to a 0.9% year-over-year\ndecrease in average ticket size, and a 20.7% year-over-year decrease in the\nnumber of orders from 10.5 million in the second quarter of 2025 to 8.3\nmillion in the same quarter of 2026.\n* Other revenues were RMB52.5 million (USD7.7 million) for the three months\nended June 30, 2026, representing a decrease of 21.7% from RMB67.1 million in\nthe same quarter of 2025. The decrease was primarily due to lower revenues\ngenerated per franchised store as a result of a decline in same-store sales\ngrowth for franchised stores, offset by an increase in the number of our\nfranchised stores from 449 as of June 30, 2025 to 484 as of June 30, 2026.\nCompany owned and operated store costs and expenses were RMB221.1 million\n(USD32.6 million) for the three months ended June 30, 2026, representing a\ndecrease of 18.8% from RMB272.4 million in the same quarter of 2025. Company\nowned and operated store costs and expenses comprise:\n* Food and packaging costs were RMB62.5 million (USD9.2 million) for the three\nmonths ended June 30, 2026, representing a decrease of 26.3% from RMB84.8\nmillion in the same quarter of 2025, which was primarily due to a decrease in\nrevenues from company owned and operated stores. As we continued to benefit\nfrom higher efficiencies in supply chains and cost reduction on raw materials,\nlogistic and warehousing expenses, food and packaging costs as a percentage of\nrevenues from company owned and operated stores decreased by 1.8 percentage\npoints from 30.1% in the second quarter of 2025 to 28.3% in the same quarter\nof 2026.\n* Rental and property management fees were RMB47.9 million (USD7.1 million)\nfor the three months ended June 30, 2026, representing a decrease of 15.6%\nfrom RMB56.8 million in the same quarter of 2025, which was primarily due to a\ndecrease in the number of our company-owned and operated stores from 566 as of\nJune 30, 2025 to 544 as of June 30, 2026. Rental and property management fees\nas a percentage of revenues from company owned and operated stores increased\nby 1.5 percentage points from 20.2% in the second quarter of 2025 to 21.7% in\nthe same quarter of 2026.\n* Payroll and employee benefits expenses were RMB43.9 million (USD6.5 million)\nfor the three months ended June 30, 2026, representing a decrease of 12.6%\nfrom RMB50.2 million in the same quarter of 2025, which was primarily due to a\ndecrease in revenues from company owned and operated stores. Payroll and\nemployee benefits expenses as a percentage of revenues from company owned and\noperated stores increased by 2.1 percentage points from 17.8% in the second\nquarter of 2025 to 19.9% in the same quarter of 2026.\n* Delivery costs were RMB28.9 million (USD4.3 million) for the three months\nended June 30, 2026, representing a decrease of 13.3% from RMB33.3 million in\nthe same quarter of 2025, which was in line with the 11.9% decrease in\ndelivery orders from 8.2 million in the second quarter of 2025 to 7.2 million\nin the same quarter of 2026, and a reduction in average delivery costs per\norder. Delivery costs as a percentage of revenues from company owned and\noperated stores increased by 1.3 percentage points to 13.1% in the second\nquarter of 2026, compared to 11.8% in the same quarter of 2025, which was\nprimarily due to an increase in delivery revenue as a percentage of revenues\nfrom company owned and operated stores from 61.0% in the second quarter of\n2025 to 65.7% in the same quarter of 2026.\n* Other operating expenses were RMB17.4 million (USD2.6 million) for the three\nmonths ended June 30, 2026, representing a decrease of 14.7% from RMB20.4\nmillion in the same quarter of 2025, which was primarily due to a decrease in\nrevenues from company owned and operated stores. Other operating expenses as a\npercentage of revenues from company owned and operated stores increased by 0.7\npercentage points to 7.9% in the second quarter of 2026, compared to 7.2% in\nthe same quarter of 2025.\n* Store depreciation and amortization expenses were RMB20.4 million (USD3.0\nmillion) for the three months ended June 30, 2026, representing a decrease of\n23.8% from RMB26.8 million in the same quarter of 2025, which was primarily\ndue to impairment on property and equipment in relation to company owned and\noperated store closures and the reduced capital expenditures per store as a\nresult of our initiatives to improve store unit economics. Store depreciation\nand amortization as a percentage of revenues from company owned and operated\nstores decreased by 0.3 percentage points to 9.2% in the second quarter of\n2026, compared to 9.5% in the same quarter of 2025.\nCosts of other revenues were RMB36.8 million (USD5.4 million) for the three\nmonths ended June 30, 2026, representing a decrease of 20.9% from RMB46.5\nmillion in the same quarter of 2025, which was in line with the revenue trend.\nCosts of other revenues as a percentage of other revenues increased by 0.8\npercentage points from 69.3% in the second quarter of 2025 to 70.1% in the\nsame quarter of 2026 due to lower margin generated from franchised business\nduring the second quarter of 2026.\n\nMarketing expenses were RMB13.3 million (USD2.0 million) for the three months\nended June 30, 2026, representing a decrease of 4.4% from RMB13.9 million in\nthe same quarter of 2025. Marketing expenses as a percentage of total revenues\nincreased by 0.9 percentage points from 4.0% in the second quarter of 2025 to\n4.9% in the same quarter of 2026 as we spent more marketing efforts to support\nour franchised business during the second quarter of 2026.\n\nGeneral and administrative expenses were RMB42.3 million (USD6.2 million) for\nthe three months ended June 30, 2026, representing an increase of 12.1% from\nRMB37.7 million in the same quarter of 2025, which was primarily due to a\nRMB4.2 million (USD0.6 million) increase in professional and other service\nfees. As a result of the foregoing, adjusted general and administrative\nexpenses, which excludes: (i) share-based compensation expenses of RMB0.3\nmillion (USD0.05 million), and (ii) impairment losses of rental deposits of\nRMB2.3 million (USD0.3 million), were RMB39.6 million (USD5.8 million),\nrepresenting an increase of 14.4% from RMB34.6 million in the same quarter of\n2025. Adjusted general and administrative expenses as a percentage of total\nrevenues increased by 4.6 percentage points from 9.9% in the second quarter of\n2025 to 14.5% in the same quarter of 2026. For more information on the\nCompany’s non-GAAP financial measures, please see “Use of Non-GAAP\nFinancial Measures” and “Reconciliation of Non-GAAP Measures to the Most\nDirectly Comparable GAAP Measures” set forth at the end of this earnings\nrelease.\n\nFranchise and royalty expenses were RMB14.4 million (USD2.1 million) for the\nthree months ended June 30, 2026, representing a decrease of 15.9% from\nRMB17.1 million in the same quarter of 2025, which was primarily due to a\ndecrease in total revenues. Franchise and royalty expenses as a percentage of\ntotal revenues increased by 0.4 percentage points, from 4.9% in the second\nquarter of 2025 to 5.3% in the same quarter of 2026, as a result of higher\nroyalty rate applicable.\n\nImpairment losses of long-lived assets were RMB4.6 million (USD0.7 million)\nfor the three months ended June 30, 2026, compared to RMB9.5 million in the\nsame quarter of 2025, which was primarily due to a decrease in the number of\nplanned closures of underperforming company owned and operated stores in the\nsecond quarter of 2026.\n\nAs a result of the foregoing, operating loss was RMB58.1 million (USD8.6\nmillion) for the three months ended June 30, 2026, compared to RMB47.8 million\nin the same quarter of 2025.\n\nAdjusted Corporate EBITDA was a loss of RMB21.0 million (USD3.1 million) for\nthe three months ended June 30, 2026, compared to a gain of RMB2.2 million in\nthe same quarter of 2025. Adjusted Corporate EBITDA margin was negative 7.6%\nin the second quarter of 2026, compared to positive 0.6% in the same quarter\nof 2025.\n\nChanges in fair value of convertible notes were a loss of RMB34.9 million\n(USD5.1 million) for the three months ended June 30, 2026, compared to a loss\nof RMB23.4 million in the same quarter of 2025.\n\nNet loss was RMB97.4 million (USD14.4 million) for the three months ended June\n30, 2026, compared to RMB75.9 million for the same quarter of 2025. Adjusted\nnet loss, which excludes: (i) share-based compensation expenses of RMB0.3\nmillion (USD0.05 million); (ii) impairment losses of long-lived assets of\nRMB4.6 million (USD0.7 million), (iii) impairment losses of rental deposits of\nRMB2.3 million (USD0.3 million), (iv) loss on disposal of property and\nequipment of RMB0.5 million (USD0.1 million), and (v) loss from changes in\nfair value of convertible notes of RMB34.9 million (USD5.1 million), was\nRMB54.9 million (USD8.1 million) for the three months ended June 30, 2026,\ncompared to RMB39.7 million for the same quarter of 2025. Adjusted net loss\nmargin was negative 20.0% in the second quarter of 2026, compared to negative\n11.4% in the same quarter of 2025.\n\nBasic and diluted loss per ordinary share was RMB3.00 (USD0.44) in the second\nquarter of 2026, compared to RMB2.32 in the same quarter of 2025. Adjusted\nbasic and diluted net loss per ordinary share was RMB1.69 (USD0.25) in the\nsecond quarter of 2026, compared to RMB1.21 in the same quarter of 2025.\n\nLiquidity\n\nAs of June 30, 2026, the total amount of the Company’s cash and cash\nequivalents and restricted cash was RMB121.1 million (USD17.8 million),\ncompared to RMB129.7 million as of December 31, 2025. The change was primarily\nattributable to cash disbursements on business operations, partially offset by\nthe draw-down of additional bank borrowings.\n\nKEY OPERATING DATA\n\n Tims only For the three months ended or as of \n （Exclude the discontinued business) Jun 30, Sep 30, Dec 31, Mar 31, June 30, \n 2025 2025 2025 2026 2026 \n \n Total stores 1,015 1,030 1,047 1,026 1,028 \n Company owned and operated stores 566 551 562 541 544 \n Franchised stores 449 479 485 485 484 \n Made to order (MTO) stores 692 730 770 765 780 \n Non-MTO stores 323 300 277 261 248 \n Same-store sales growth for system-wide stores -4.8 % 1.3 % -2.4 % -13.2 % -17.8 % \n Same-store sales growth for company owned and operated stores -3.6 % 3.3 % -1.4 % -12.4 % -17.3 % \n Registered loyalty club members (in thousands) 26,192 27,900 31,021 35,930 37,118 \n Company owned and operated store contribution (Renminbi in thousands) 27,176 21,786 9,164 3,730 12,584 \n Company owned and operated store contribution margin 9.6 % 7.7 % 3.7 % 1.8 % 5.7 % \n \n\nKEY DEFINITIONS\n* Same-store sales growth. The percentage change in the sales of stores that\nhave been operating for 12 months or longer during a certain period compared\nto the same period from the prior year. The same-store sales growth for any\nperiod of more than a month equals the arithmetic average of the same-store\nsales growth of each month covered in the period. If a store was closed for\nseven days or more during any given month, its sales during that month and the\nsame month in the comparison period are excluded for purposes of measuring\nsame-store sales growth.\n* Net new store openings. The gross number of new stores opened during the\nperiod minus the number of stores permanently closed during the period.\n* System sales. Gross merchandise value of sales generated from both company\nowned and operated stores and franchised stores.\n* Company owned and operated store contribution (previously reported as\nadjusted store EBITDA). Calculated as fully burdened gross profit of company\nowned and operated stores excluding depreciation and amortization.\n* Company owned and operated store contribution margin (previously reported as\nadjusted store EBITDA margin). Calculated as company owned and operated store\ncontribution as a percentage of revenues from company owned and operated\nstores.\n* Adjusted general and administrative expenses. Calculated as general and\nadministrative expenses excluding share-based compensation expenses,\nprofessional fees related to financing programs, and impairment losses of\nrental deposits.\n* Adjusted corporate EBITDA. Calculated as operating loss excluding certain\nnon-cash expenses consisting of depreciation and amortization, share-based\ncompensation expenses, impairment losses of long-lived assets, loss on\ndisposal of property and equipment, professional fees related to financing\nprograms, and impairment losses of rental deposits.\n* Adjusted corporate EBITDA margin. Calculated as adjusted corporate EBITDA as\na percentage of total revenues.\n* Adjusted net loss. Calculated as net loss excluding share-based compensation\nexpenses, impairment losses of long-lived assets, loss on disposal of property\nand equipment, professional fees related to financing programs, impairment\nlosses of rental deposits, and changes in fair value of convertible notes.\n* Adjusted net loss margin. Calculated as adjusted net loss as a percentage of\ntotal revenues.\n* Adjusted basic and diluted net loss per ordinary share. Calculated as\nadjusted net loss attributable to the Company’s ordinary shareholders\ndivided by weighted-average number of basic and diluted ordinary shares.\nRECENT BUSINESS DEVELOPMENT\n\nOn August 13, 2026, Tims China announced the official launch of a joint\nmembership campaign with China Southern Airlines. The two companies will work\ntogether on member benefits integration, consumer touchpoint fusion, and\nservice experience innovation, giving members of both programs a new “coffee\nplus travel” lifestyle experience and expanding the membership service\necosystem.\n\nUSE OF NON-GAAP FINANCIAL MEASURES\n\nThe Company uses non-GAAP financial measures, namely company owned and\noperated store contribution, company owned and operated store contribution\nmargin, adjusted general and administrative expenses, adjusted corporate\nEBITDA, adjusted corporate EBITDA margin, adjusted net loss, adjusted net loss\nmargin, and adjusted basic and diluted net loss per ordinary share in\nevaluating its operating results and for financial and operational\ndecision-making purposes. The Company defines (i) company owned and operated\nstore contribution as fully burdened gross profit of company owned and\noperated stores excluding depreciation and amortization; (ii) company owned\nand operated store contribution margin as company owned and operated store\ncontribution as a percentage of revenues from company owned and operated\nstores; (iii) adjusted general and administrative expenses as general and\nadministrative expenses excluding share-based compensation expenses,\nprofessional fees related to financing programs, and impairment losses of\nrental deposits; (iv) adjusted corporate EBITDA as operating loss excluding\ncertain non-cash expenses consisting of depreciation and amortization,\nshare-based compensation expenses, impairment losses of long-lived assets,\nloss on disposal of property and equipment, professional fees related to\nfinancing programs, and impairment losses of rental deposits; (v) adjusted\ncorporate EBITDA margin as adjusted corporate EBITDA as a percentage of total\nrevenues; (vi) adjusted net loss as net loss excluding share-based\ncompensation expenses, impairment losses of long-lived assets, loss on\ndisposal of property and equipment, professional fees related to financing\nprograms, impairment losses of rental deposits, and changes in fair value of\nconvertible notes; (vii) adjusted net loss margin as adjusted net loss as a\npercentage of total revenues; and (viii) adjusted basic and diluted net loss\nper ordinary share as adjusted net loss attributable to the Company’s\nordinary shareholders divided by weighted-average number of basic and diluted\nordinary shares. The Company believes company owned and operated store\ncontribution, company owned and operated store contribution margin, adjusted\ngeneral and administrative expenses, adjusted corporate EBITDA, adjusted\ncorporate EBITDA margin, adjusted net loss, adjusted net loss margin, and\nadjusted basic and diluted net loss per ordinary share enhance investors'\noverall understanding of its financial performance and allow for greater\nvisibility with respect to key metrics used by its management in its financial\nand operational decision-making.\n\nThese non-GAAP financial measures are not defined under U.S. GAAP and are not\npresented in accordance with U.S. GAAP. As these non-GAAP financial measures\nhave limitations as analytical tools and may not be calculated in the same\nmanner by all companies, they may not be comparable to other similarly titled\nmeasures used by other companies. The Company compensates for these\nlimitations by reconciling the non-GAAP financial measures to the nearest U.S.\nGAAP performance measures, which should be considered when evaluating the\nCompany’s performance. For reconciliation of these non-GAAP financial\nmeasures to the most directly comparable GAAP financial measures, please see\nthe section of the accompanying tables titled, “Reconciliation of Non-GAAP\nMeasures to the Most Directly Comparable GAAP Measures.” The Company\nencourages investors and others to review its financial information in its\nentirety and not rely on any single financial measure.\n\nEXCHANGE RATE INFORMATION\n\nThis earnings release contains translations of certain RMB amounts into U.S.\ndollars (“USD”) at specified rates solely for the convenience of the\nreader. Unless otherwise stated, all translations from RMB to USD were made at\nthe rate of RMB6.7851 to USD1.00, the exchange rate in effect on June 30, 2026\nset forth in the H.10 statistical release of the Federal Reserve Board. The\nCompany makes no representation that the RMB or USD amounts referred could be\nconverted into USD or RMB, as the case may be, at any rate or at all.\n\nCONFERENCE CALL\n\nThe Company will hold a conference call today, on Tuesday, August 18, 2026, at\n8:00 am Eastern Time (on Tuesday, August 18, 2026, at 8:00 pm Beijing Time) to\ndiscuss the financial results.\n\nParticipants are strongly encouraged to pre-register for the conference call,\nby using the weblink provided below.\n\nhttps://register-conf.media-server.com/register/BIe1051e377efc4328b00acdcfb0146d50\n\nParticipants may also view the live webcast by registering through below\nweblink:\n\nhttps://edge.media-server.com/mmc/p/y7354vo8\n\nThe webcast features a ‘Submit Your Question’ tab at the top, where you\nwill have the opportunity to submit your questions before and during the call.\n\nA live and archived webcast of the conference call will also be available at\nthe Company’s Investor Relations website at https://ir.timschina.com under\n“Events and Presentations”.\n\nFORWARD-LOOKING STATEMENTS\n\nCertain statements in this earnings release may be considered forward-looking\nstatements within the meaning of the “safe harbor” provisions of the\nUnited States Private Securities Litigation Reform Act of 1995, such as the\nCompany’s ability to further grow its business and store network, optimize\nits cost structure, improve its operational efficiency, and achieve profitable\ngrowth. Forward-looking statements are statements that are not historical\nfacts and generally relate to future events or the Company’s future\nfinancial or other performance metrics. In some cases, you can identify\nforward-looking statements by terminology such as “believe,” “may,”\n“will,” “potentially,” “estimate,” “continue,”\n“anticipate,” “intend,” “could,” “would,” “project,”\n“target,” “plan,” “expect,” or the negatives of these terms or\nvariations of them or similar terminology. Such forward-looking statements are\nsubject to risks and uncertainties, which could cause actual results to differ\nmaterially from those expressed or implied by such forward looking statements.\nNew risks and uncertainties may emerge from time to time, and it is not\npossible to predict all risks and uncertainties. These forward-looking\nstatements are based upon estimates and assumptions that, while considered\nreasonable by the Company and its management, as the case may be, are\ninherently uncertain and subject to material change. Factors that may cause\nactual results to differ materially from current expectations include various\nfactors beyond management’s control, including, but not limited to, general\neconomic conditions and other risks, uncertainties and factors set forth in\nthe sections entitled “Risk Factors” and “Cautionary Statement Regarding\nForward-Looking Statements” in the Company’s Annual Report on Form 20-F,\nand other filings it makes with the Securities and Exchange Commission.\nNothing in this communication should be regarded as a representation by any\nperson that the forward-looking statements set forth herein will be achieved\nor that any of the contemplated results of such forward-looking statements\nwill be achieved. You should not place undue reliance on forward-looking\nstatements in this communication, which speak only as of the date they are\nmade and are qualified in their entirety by reference to the cautionary\nstatements herein. Except as required by law, the Company expressly disclaims\nany obligations or undertaking to release publicly any updates or revisions to\nany forward-looking statements contained herein to reflect any change in the\nCompany’s expectations with respect thereto or any change in events,\nconditions, or circumstances on which any statement is based.\n\nABOUT TH INTERNATIONAL LIMITED\n\nTH International Limited (Nasdaq: THCH) (“Tims China”) is the parent\ncompany of the exclusive master franchisees of Tim Hortons coffee shops in\nmainland China, Hong Kong and Macau.\n\nThe Company’s philosophy is rooted in world-class execution and data-driven\ndecision making and centered around true local relevance, continuous\ninnovation, genuine community, and absolute convenience. For more information,\nplease visit https://www.timschina.com.\n\nIMPORTANT NOTICE REGARDING THE TIM HORTONS® BRAND\n\nThe TIM HORTONS® brand and related trademarks are used by Tims China pursuant\nto a franchise agreement with Tim Hortons Restaurants International GmbH and\nits affiliates (collectively, the “Identified Persons”). The Identified\nPersons are entities entirely separate and distinct from Tims China and its\nsubsidiaries (the “Group”). No Identified Person exercises any control\nover the business, operations, finances or management of the Group, and no\nIdentified Person is responsible for any obligations or liabilities of the\nGroup.\n\nINVESTOR AND MEDIA CONTACTS\n\nInvestor Relations\n\nIR@timschina.com\n\nPublic and Media Relations\n\nPatty Yu\nPatty.Yu@timschina.com\n\n\n\n TH INTERNATIONAL LIMITED AND SUBSIDIARIES \n UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS \n (Amounts in thousands of RMB and US$, except for number of shares) \n \n As of \n December 31, 2025 June 30, 2026 \n RMB RMB US$ \n \n ASSETS \n Current assets: \n Cash and cash equivalents 121,795 107,833 15,892 \n Restricted Cash 7,916 13,222 1,949 \n Amount due from related parties 195 - - \n Accounts receivable, net 17,692 12,212 1,800 \n Inventories 36,793 32,938 4,854 \n Prepaid expenses and other current assets 142,235 128,813 18,985 \n Total current assets 326,626 295,018 43,480 \n \n Non-current assets: \n Property and equipment, net 332,070 287,164 42,323 \n Intangible assets, net 81,014 72,768 10,725 \n Operating lease right-of-use assets 348,916 268,491 39,571 \n Other non-current assets 88,051 104,193 15,356 \n Total non-current assets 850,051 732,616 107,975 \n Total assets 1,176,677 1,027,634 151,455 \n \n LIABILITIES AND SHAREHOLDERS’EQUITY \n Current liabilities: \n Bank borrowings, current 395,088 448,377 66,083 \n Accounts payable 199,152 180,897 26,661 \n Contract liabilities 37,197 33,229 4,897 \n Amount due to related parties 17,414 53,035 7,816 \n Operating lease liabilities 180,806 169,239 24,943 \n Other current liabilities 172,605 174,358 25,697 \n Total current liabilities 1,002,262 1,059,135 156,097 \n \n Non-current liabilities: \n Convertible notes, at fair value 1,152,723 1,183,734 174,461 \n Contract liabilities 10,133 8,373 1,234 \n Operating lease liabilities 240,282 175,901 25,925 \n Other non-current liabilities 7,712 7,152 1,054 \n Total non-current liabilities 1,410,850 1,375,160 202,674 \n Total liabilities 2,413,112 2,434,295 358,771 \n \n Shareholders’ equity: \n Ordinary shares 10 10 1 \n Additional paid-in capital 1,821,605 1,823,869 268,805 \n Accumulated losses (3,102,994 ) (3,310,359 ) (487,887 ) \n Accumulated other comprehensive income 38,393 72,619 10,704 \n Treasury shares - - - \n Total deficit attributable to shareholders of the Company (1,242,986 ) (1,413,861 ) (208,377 ) \n Non-controlling interests 6,551 7,200 1,061 \n Total shareholders' deficit (1,236,435 ) (1,406,661 ) (207,316 ) \n \n Commitments and Contingencies - - - \n \n Total liabilities and shareholders' deficit 1,176,677 1,027,634 151,455 \n \n\n\n\n TH INTERNATIONAL LIMITED AND SUBSIDIARIES \n UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME/(LOSS) \n (Amounts in thousands of RMB and US$, except for per share data) \n \n For the three months ended June 30, For the six months ended June 30， \n 2025 2026 2025 2026 \n RMB RMB US$ RMB RMB US$ \n Revenues: \n Company owned and operated stores 281,872 220,855 32,550 536,631 428,071 63,090 \n Other revenues 67,104 52,522 7,741 113,087 102,047 15,040 \n Total revenues 348,976 273,377 40,291 649,718 530,118 78,130 \n \n Costs and expenses, net: \n Company owned and operated stores \n Food and packaging 84,807 62,495 9,211 162,279 121,427 17,896 \n Rental and property management fee 56,824 47,943 7,066 113,119 95,142 14,022 \n Payroll and employee benefits 50,227 43,882 6,467 100,247 88,700 13,073 \n Delivery costs 33,338 28,912 4,262 60,379 56,235 8,287 \n Other operating expenses 20,424 17,425 2,568 38,442 35,605 5,248 \n Store depreciation and amortization 26,789 20,406 3,007 55,147 41,992 6,189 \n Company owned and operated store costs and expenses 272,409 221,063 32,581 529,613 439,101 64,715 \n \n Costs of other revenues 46,502 36,804 5,424 78,028 69,852 10,295 \n Marketing expenses 13,906 13,295 1,959 31,335 23,104 3,405 \n General and administrative expenses 37,698 42,261 6,229 89,508 90,305 13,311 \n Franchise and royalty expenses 17,089 14,366 2,117 30,985 27,901 4,112 \n Other operating costs and expenses 98 616 91 1,213 1,175 173 \n Loss on disposal of property and equipment 247 502 74 2,980 1,114 164 \n Impairment losses of long-lived assets 9,485 4,563 673 21,103 10,450 1,540 \n Other income 679 1,986 293 1,965 2,502 369 \n Total costs and expenses, net 396,755 331,484 48,855 782,800 660,500 97,346 \n \n Operating loss (47,779 ) (58,107 ) (8,564 ) (133,082 ) (130,382 ) (19,216 ) \n \n Interest income 983 1,145 169 1,083 1,545 228 \n Interest expenses (4,831 ) (4,285 ) (632 ) (8,407 ) (8,239 ) (1,214 ) \n Foreign currency transaction loss (431 ) (1,337 ) (197 ) (51 ) (2,181 ) (322 ) \n Changes in fair value of convertible notes (23,383 ) (34,857 ) (5,137 ) 6,075 (67,459 ) (9,942 ) \n \n Loss before income taxes (75,441 ) (97,441 ) (14,361 ) (134,382 ) (206,716 ) (30,466 ) \n Income tax expenses (484 ) - - (484 ) - - \n Net loss (75,925 ) (97,441 ) (14,361 ) (134,866 ) (206,716 ) (30,466 ) \n \n Less: Net (loss)/income attributable to non-controlling interests (470 ) 28 4 (1,390 ) 649 96 \n Net loss attributable to shareholders of the Company (75,455 ) (97,469 ) (14,365 ) (133,476 ) (207,365 ) (30,562 ) \n Basic and diluted loss per Ordinary Share (2.32 ) (3.00 ) (0.44 ) (4.10 ) (6.38 ) (0.94 ) \n \n Net loss (75,925 ) (97,441 ) (14,361 ) (134,866 ) (206,716 ) (30,466 ) \n \n Other comprehensive income/(loss) \n Fair value changes of convertible notes due to instrument-specific credit risk, net of nil income taxes (286 ) - - 144 - - \n Foreign currency translation adjustment, net of nil income taxes 2,360 16,156 2,381 3,177 34,226 5,044 \n \n Total comprehensive loss (73,851 ) (81,285 ) (11,980 ) (131,545 ) (172,490 ) (25,422 ) \n \n Less: Comprehensive (loss)/income attributable to non-controlling interests (470 ) 28 4 (1,390 ) 649 96 \n Comprehensive loss attributable to shareholders of the Company (73,381 ) (81,313 ) (11,984 ) (130,155 ) (173,139 ) (25,518 ) \n \n\n\n\n TH INTERNATIONAL LIMITED AND SUBSIDIARIES \n UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS \n (Amounts in thousands of RMB and US$) \n \n For the three months ended June 30, For the six months ended June 30, \n 2025 2026 2025 2026 \n RMB RMB US$ RMB RMB US$ \n Net cash (used in)/provided by operating activities (1,175 ) 33,968 5,006 (1,394 ) 10,424 1,536 \n Net cash used in investing activities (36,715 ) (9,169 ) (1,351 ) (53,373 ) (20,641 ) (3,042 ) \n Net cash (used in)/provided by financing activities 5,900 (13,788 ) (2,032 ) 50,113 4,633 683 \n Effect of foreign currency exchange rate changes on cash (688 ) (1,363 ) (201 ) (825 ) (3,072 ) (453 ) \n Net increase/(decrease) in cash (32,678 ) 9,648 1,422 (5,479 ) (8,656 ) (1,276 ) \n Cash and cash equivalents and restricted cash, at beginning of the period 211,436 111,407 16,419 184,237 129,711 19,117 \n Cash and cash equivalents and restricted cash, at end of the period 178,758 121,055 17,841 178,758 121,055 17,841 \n \n\n\n\n TH INTERNATIONAL LIMITED AND SUBSIDIARIES \n RECONCILIATION OF NON-GAAP MEASURES TO THE MOST DIRECTLY COMPARABLE GAAP MEASURES \n (Unaudited, amounts in thousands of RMB and US$, except for number of shares and per share data) \n \n A. Company owned and operated store contribution \n For the three months ended June 30, For the six months ended June 30， \n 2025 2026 2025 2026 \n RMB % of Revenues - company owned and operated stores RMB US$ % of Revenues - company owned and operated stores RMB % of Revenues - company owned and operated stores RMB US$ % of Revenues - company owned and operated stores \n Revenues - company owned and operated stores 281,872 100.0 220,855 32,550 100.0 536,631 100.0 428,071 63,090 100.0 \n Food and packaging costs - company owned and operated stores (84,807 ) (30.1 ) (62,495 ) (9,211 ) (28.3 ) (162,279 ) (30.2 ) (121,427 ) (17,896 ) (28.4 ) \n Rental expenses - company owned and operated stores (56,824 ) (20.2 ) (47,943 ) (7,066 ) (21.7 ) (113,119 ) (21.1 ) (95,142 ) (14,022 ) (22.2 ) \n Payroll and employee benefits - company owned and operated stores (50,227 ) (17.8 ) (43,882 ) (6,467 ) (19.9 ) (100,247 ) (18.7 ) (88,700 ) (13,073 ) (20.7 ) \n Delivery costs - company owned and operated stores (33,338 ) (11.8 ) (28,912 ) (4,262 ) (13.1 ) (60,379 ) (11.3 ) (56,235 ) (8,287 ) (13.1 ) \n Other operating expenses - company owned and operated stores (20,424 ) (7.2 ) (17,425 ) (2,568 ) (7.9 ) (38,442 ) (7.2 ) (35,605 ) (5,248 ) (8.3 ) \n Store depreciation and amortization (26,789 ) (9.5 ) (20,406 ) (3,007 ) (9.2 ) (55,147 ) (10.3 ) (41,992 ) (6,189 ) (9.8 ) \n Franchise and royalty expenses - company owned and operated stores (9,076 ) (3.3 ) (7,614 ) (1,122 ) (3.4 ) (17,835 ) (3.2 ) (14,648 ) (2,159 ) (3.5 ) \n Fully-burdened gross (loss) profit - company owned and operated stores 387 0.1 (7,822 ) (1,153 ) (3.5 ) (10,817 ) (2.0 ) (25,678 ) (3,784 ) (6.0 ) \n Store depreciation and amortization 26,789 9.5 20,406 3,007 9.2 55,147 10.3 41,992 6,189 9.8 \n \n Company owned and operated store contribution 27,176 9.6 12,584 1,854 5.7 44,330 8.3 16,314 2,405 3.8 \n Company owned and operated store contribution margin 9.6 % 9.6 % 5.7 % 5.7 % 5.7 % 8.3 % 8.3 % 3.8 % 3.8 % 3.8 % \n \n B. Adjusted general and administrative expenses \n For the three months ended June 30, For the six months ended June 30， \n 2025 2026 2025 2026 \n RMB % of Total Revenues RMB US$ % of Total Revenues RMB % of Total Revenues RMB US$ % of Total Revenues \n General and administrative expenses (37,698 ) (10.8 ) (42,261 ) (6,229 ) (15.5 ) (89,508 ) (13.9 ) (90,305 ) (13,311 ) (17.0 ) \n Adjusted for: \n Share-based compensation expenses 749 0.2 320 47 0.1 1,825 0.3 1,836 271 0.3 \n Professional fees related to financing programs - - - - - 1,007 0.2 - - - \n Impairment losses of rental deposits 2,335 0.7 2,347 346 0.9 4,896 0.8 5,440 802 1.0 \n Adjusted General and administrative expenses (34,614 ) (9.9 ) (39,594 ) (5,836 ) (14.5 ) (81,780 ) (12.6 ) (83,029 ) (12,238 ) (15.7 ) \n \n C. Adjusted corporate EBITDA and adjusted corporate EBITDA margin \n For the three months ended June 30, For the six months ended June 30， \n 2025 2026 2025 2026 \n RMB % of Total Revenues RMB US$ % of Total Revenues RMB % of Total Revenues RMB US$ % of Total Revenues \n Operating loss (47,779 ) (13.7 ) (58,107 ) (8,564 ) (21.3 ) (133,082 ) (20.6 ) (130,382 ) (19,216 ) (24.6 ) \n Adjusted for: \n Depreciation and amortization 37,158 10.6 29,423 4,336 10.8 74,171 11.4 60,465 8,911 11.4 \n Share-based compensation expenses 749 0.2 320 47 0.1 1,825 0.3 1,836 271 0.3 \n Impairment losses of rental deposits 2,335 0.7 2,347 346 0.9 4,896 0.8 5,440 802 1.0 \n Professional fees related to financing programs - - - - - 1,007 0.2 - - - \n Impairment losses of long-lived assets 9,485 2.7 4,563 673 1.7 21,103 3.2 10,450 1,540 2.0 \n Loss on disposal of property and equipment 247 0.1 502 74 0.2 2,980 0.5 1,114 164 0.2 \n Adjusted Corporate EBITDA 2,195 0.6 (20,952 ) (3,088 ) (7.6 ) (27,100 ) (4.2 ) (51,077 ) (7,528 ) (9.7 ) \n \n \n D. Adjusted net loss and adjusted net loss margin \n For the three months ended June 30, For the six months ended June 30， \n 2025 2026 2025 2026 \n RMB % of Total Revenues RMB US$ % of Total Revenues RMB % of Total Revenues RMB US$ % of Total Revenues \n Net loss (75,925 ) (21.8 ) (97,441 ) (14,361 ) (35.6 ) (134,866 ) (20.9 ) (206,716 ) (30,466 ) (39.0 ) \n Adjusted for: \n Share-based compensation expenses 749 0.2 320 47 0.1 1,825 0.3 1,836 271 0.3 \n Professional fees related to financing programs - - - - - 1,007 0.2 - - - \n Impairment losses of long-lived assets 9,485 2.7 4,563 673 1.7 21,103 3.2 10,450 1,540 2.0 \n Impairment losses of rental deposits 2,335 0.7 2,347 346 0.9 4,896 0.8 5,440 802 1.0 \n Loss on disposal of property and equipment 247 0.1 502 74 0.2 2,980 0.5 1,114 164 0.2 \n Changes in fair value of convertible notes 23,383 6.7 34,857 5,137 12.7 (6,075 ) (0.9 ) 67,459 9,942 12.7 \n Adjusted Net loss (39,726 ) (11.4 ) (54,852 ) (8,084 ) (20.0 ) (109,130 ) (16.8 ) (120,417 ) (17,747 ) (22.8 ) \n \n E. Adjusted basic and diluted net loss per Ordinary Share \n For the three months ended June 30, For the six months ended June 30， \n 2025 2026 2025 2026 \n RMB Unadjusted and Adjusted Basic and diluted loss per Ordinary Share RMB RMB US$ Unadjusted and Adjusted Basic and diluted loss per Ordinary Share USD RMB Unadjusted and Adjusted Basic and diluted loss per Ordinary Share RMB RMB US$ Unadjusted and Adjusted Basic and diluted loss per Ordinary Share USD \n Net loss attributable to shareholders of the Company (75,455 ) (2.32 ) (97,469 ) (14,365 ) (0.44 ) (133,476 ) (4.10 ) (207,365 ) (30,562 ) (0.94 ) \n Adjusted for: \n Share-based compensation expenses 749 0.02 320 47 0.00 1,825 0.06 1,836 271 0.01 \n Professional fees related to financing programs - - - - - 1,007 0.03 - - - \n Impairment losses of long-lived assets 9,485 0.29 4,563 673 0.02 21,103 0.65 10,450 1,540 0.05 \n Impairment losses of rental deposits 2,335 0.07 2,347 346 0.01 4,896 0.15 5,440 802 0.02 \n Loss on disposal of property and equipment 247 0.01 502 74 0.00 2,980 0.09 1,114 164 0.01 \n Changes in fair value of convertible notes 23,383 0.72 34,857 5,137 0.16 (6,075 ) (0.19 ) 67,459 9,942 0.30 \n Adjusted Net loss attributable to shareholders of the Company (39,256 ) (1.21 ) (54,880 ) (8,088 ) (0.25 ) (107,740 ) (3.31 ) (121,066 ) (17,843 ) (0.55 ) \n Weighted average shares outstanding used in calculating basic and diluted loss per share 32,541,772 N/A 32,519,377 32,519,377 N/A 32,540,993 N/A 32,519,377 32,519,377 N/A \n Adjusted basic and diluted net loss per Ordinary Share (1.21 ) (1.69 ) (0.25 ) (3.31 ) (3.72 ) (0.55 ) \n \n\n\n\n(https://www.globenewswire.com/NewsRoom/AttachmentNg/2202805b-cc31-455b-bc26-27a341f4d1bc)\n\n\n\nGlobeNewswire, Inc. 2026","article_body_html":"","raw_payload":{"data":{"id":"nGNXbkz1jY","title":"Tims China Announces Second Quarter 2026 Financial Results","author":"Globe Newswire","ticker":"THCH","created":"2026-08-18T09:30:00.562Z","tickers":["THCH"],"exchange":"NASDAQ","article_body":"SHANGHAI and NEW YORK, Aug. 18, 2026 (GLOBE NEWSWIRE) -- TH International\nLimited (Nasdaq: THCH), the parent company of the exclusive master franchisees\nof Tim Hortons coffee shops in China (“Tims China” or the “Company”),\ntoday announced its unaudited financial results for the second quarter 2026.\n\nSECOND QUARTER 2026 HIGHLIGHTS\n* Total revenues of RMB273.4 million (USD40.3 million), representing\na 21.7% decrease from the same quarter of 2025.\n* System sales(1) of RMB347.8 million (USD51.3 million), representing a 15.1%\ndecrease from the same quarter of 2025.\n* Net new store openings totaled two (a net opening of 15 made-to-order\n(“MTO”) stores and a net closure of 13 non-MTO stores).\n* Company owned and operated store contribution(2), previously reported as\nadjusted store EBITDA, was RMB12.6 million (USD1.9 million), compared to\nRMB27.2 million in the same quarter of 2025.\n* Company owned and operated store contribution margin(3), previously reported\nas adjusted store EBITDA margin, was 5.7%, compared to 9.6% in the same\nquarter of 2025.\n* Registered loyalty club members totaled 37.1 million as of June 30, 2026,\nrepresenting a 41.7% year-over-year growth.\n__________________________________\n\n(1) System sales is calculated as the gross merchandise value of sales\ngenerated from both company owned and operated stores and franchised stores.\n(2) Company owned and operated store contribution, is calculated as fully\nburdened gross profit(4) of company owned and operated stores excluding\ndepreciation & amortization. \n(3) Company owned and operated store contribution margin, is calculated as\ncompany owned and operated store contribution as a percentage of revenues from\ncompany owned and operated stores.\n(4 )Fully burdened gross profit of company owned and operated stores, the most\ndirectly comparable GAAP measure to company owned and operated store\ncontribution, was a loss of RMB7.2 million (USD1.1 million) for the three\nmonths ended June 30, 2026, compared to a gain of RMB0.4 million in the same\nquarter of 2025.\n\nCOMPANY MANAGEMENT STATEMENT\n\nMr. Kwok Wah (John) Cheung, CEO of Tims China, stated, “The second quarter\nwas a period of transition for Tims China. Our top-line results were impacted\nby our proactive decision to close underperforming stores, as well as pressure\non same-store sales as we lapped strong delivery performance from last year.\nIt is clear that we need to make meaningful changes to our strategy to win\nback customers. My experience tells me that when we focus on our core identity\nand consistently deliver great products and a great guest experience, our\ncustomers will respond. I have full confidence in Tims China’s ability to\nimprove the business and regain market share. We have a clear plan and are\nmoving quickly to return the business to growth. We already see green shoots\nin the business when we look at our registered loyalty club membership, which\nreached more than 37.1 million as of June 30, 2026, up 41.7% year over year,\nproviding a strong foundation to deepen customer engagement and support future\ngrowth”.\n\nMr. Dong (Albert) Li, CFO of Tims China, commented, “We successfully closed\nthe initial tranche of US$15.8 million in additional senior secured\nconvertible notes issued to Tim Hortons Restaurants International GmbH\n(“THRI”), our brand owner and founding shareholder, in July 2026. With the\nproceeds from this series of proposed financing, we plan to drive our\ninnovation and product offerings, invest more in marketing activities, and\ndeploy a more balanced store network development strategy by opening both\ncompany owned and operated stores and franchised stores going forward”.\n\nSECOND QUARTER 2026 FINANCIAL RESULTS\n\nTotal revenues were RMB273.4 million (USD40.3 million) for the three months\nended June 30, 2026, representing a decrease of 21.7% from RMB349.0 million in\nthe same quarter of 2025. Total revenues comprise:\n* Revenues from company owned and operated stores were RMB220.9 million\n(USD32.6 million) for the three months ended June 30, 2026, representing a\ndecrease of 21.6% from RMB281.9 million in the same quarter of 2025. The\ndecrease was primarily attributable to closures of certain underperforming\nstores as the number of company owned and operated stores decreased from 566\nas of June 30, 2025 to 544 as of June 30, 2026, and a 17.3% decline in\nsame-store sales growth for company owned and operated stores in the second\nquarter of 2026. The decrease was also attributable to a 0.9% year-over-year\ndecrease in average ticket size, and a 20.7% year-over-year decrease in the\nnumber of orders from 10.5 million in the second quarter of 2025 to 8.3\nmillion in the same quarter of 2026.\n* Other revenues were RMB52.5 million (USD7.7 million) for the three months\nended June 30, 2026, representing a decrease of 21.7% from RMB67.1 million in\nthe same quarter of 2025. The decrease was primarily due to lower revenues\ngenerated per franchised store as a result of a decline in same-store sales\ngrowth for franchised stores, offset by an increase in the number of our\nfranchised stores from 449 as of June 30, 2025 to 484 as of June 30, 2026.\nCompany owned and operated store costs and expenses were RMB221.1 million\n(USD32.6 million) for the three months ended June 30, 2026, representing a\ndecrease of 18.8% from RMB272.4 million in the same quarter of 2025. Company\nowned and operated store costs and expenses comprise:\n* Food and packaging costs were RMB62.5 million (USD9.2 million) for the three\nmonths ended June 30, 2026, representing a decrease of 26.3% from RMB84.8\nmillion in the same quarter of 2025, which was primarily due to a decrease in\nrevenues from company owned and operated stores. As we continued to benefit\nfrom higher efficiencies in supply chains and cost reduction on raw materials,\nlogistic and warehousing expenses, food and packaging costs as a percentage of\nrevenues from company owned and operated stores decreased by 1.8 percentage\npoints from 30.1% in the second quarter of 2025 to 28.3% in the same quarter\nof 2026.\n* Rental and property management fees were RMB47.9 million (USD7.1 million)\nfor the three months ended June 30, 2026, representing a decrease of 15.6%\nfrom RMB56.8 million in the same quarter of 2025, which was primarily due to a\ndecrease in the number of our company-owned and operated stores from 566 as of\nJune 30, 2025 to 544 as of June 30, 2026. Rental and property management fees\nas a percentage of revenues from company owned and operated stores increased\nby 1.5 percentage points from 20.2% in the second quarter of 2025 to 21.7% in\nthe same quarter of 2026.\n* Payroll and employee benefits expenses were RMB43.9 million (USD6.5 million)\nfor the three months ended June 30, 2026, representing a decrease of 12.6%\nfrom RMB50.2 million in the same quarter of 2025, which was primarily due to a\ndecrease in revenues from company owned and operated stores. Payroll and\nemployee benefits expenses as a percentage of revenues from company owned and\noperated stores increased by 2.1 percentage points from 17.8% in the second\nquarter of 2025 to 19.9% in the same quarter of 2026.\n* Delivery costs were RMB28.9 million (USD4.3 million) for the three months\nended June 30, 2026, representing a decrease of 13.3% from RMB33.3 million in\nthe same quarter of 2025, which was in line with the 11.9% decrease in\ndelivery orders from 8.2 million in the second quarter of 2025 to 7.2 million\nin the same quarter of 2026, and a reduction in average delivery costs per\norder. Delivery costs as a percentage of revenues from company owned and\noperated stores increased by 1.3 percentage points to 13.1% in the second\nquarter of 2026, compared to 11.8% in the same quarter of 2025, which was\nprimarily due to an increase in delivery revenue as a percentage of revenues\nfrom company owned and operated stores from 61.0% in the second quarter of\n2025 to 65.7% in the same quarter of 2026.\n* Other operating expenses were RMB17.4 million (USD2.6 million) for the three\nmonths ended June 30, 2026, representing a decrease of 14.7% from RMB20.4\nmillion in the same quarter of 2025, which was primarily due to a decrease in\nrevenues from company owned and operated stores. Other operating expenses as a\npercentage of revenues from company owned and operated stores increased by 0.7\npercentage points to 7.9% in the second quarter of 2026, compared to 7.2% in\nthe same quarter of 2025.\n* Store depreciation and amortization expenses were RMB20.4 million (USD3.0\nmillion) for the three months ended June 30, 2026, representing a decrease of\n23.8% from RMB26.8 million in the same quarter of 2025, which was primarily\ndue to impairment on property and equipment in relation to company owned and\noperated store closures and the reduced capital expenditures per store as a\nresult of our initiatives to improve store unit economics. Store depreciation\nand amortization as a percentage of revenues from company owned and operated\nstores decreased by 0.3 percentage points to 9.2% in the second quarter of\n2026, compared to 9.5% in the same quarter of 2025.\nCosts of other revenues were RMB36.8 million (USD5.4 million) for the three\nmonths ended June 30, 2026, representing a decrease of 20.9% from RMB46.5\nmillion in the same quarter of 2025, which was in line with the revenue trend.\nCosts of other revenues as a percentage of other revenues increased by 0.8\npercentage points from 69.3% in the second quarter of 2025 to 70.1% in the\nsame quarter of 2026 due to lower margin generated from franchised business\nduring the second quarter of 2026.\n\nMarketing expenses were RMB13.3 million (USD2.0 million) for the three months\nended June 30, 2026, representing a decrease of 4.4% from RMB13.9 million in\nthe same quarter of 2025. Marketing expenses as a percentage of total revenues\nincreased by 0.9 percentage points from 4.0% in the second quarter of 2025 to\n4.9% in the same quarter of 2026 as we spent more marketing efforts to support\nour franchised business during the second quarter of 2026.\n\nGeneral and administrative expenses were RMB42.3 million (USD6.2 million) for\nthe three months ended June 30, 2026, representing an increase of 12.1% from\nRMB37.7 million in the same quarter of 2025, which was primarily due to a\nRMB4.2 million (USD0.6 million) increase in professional and other service\nfees. As a result of the foregoing, adjusted general and administrative\nexpenses, which excludes: (i) share-based compensation expenses of RMB0.3\nmillion (USD0.05 million), and (ii) impairment losses of rental deposits of\nRMB2.3 million (USD0.3 million), were RMB39.6 million (USD5.8 million),\nrepresenting an increase of 14.4% from RMB34.6 million in the same quarter of\n2025. Adjusted general and administrative expenses as a percentage of total\nrevenues increased by 4.6 percentage points from 9.9% in the second quarter of\n2025 to 14.5% in the same quarter of 2026. For more information on the\nCompany’s non-GAAP financial measures, please see “Use of Non-GAAP\nFinancial Measures” and “Reconciliation of Non-GAAP Measures to the Most\nDirectly Comparable GAAP Measures” set forth at the end of this earnings\nrelease.\n\nFranchise and royalty expenses were RMB14.4 million (USD2.1 million) for the\nthree months ended June 30, 2026, representing a decrease of 15.9% from\nRMB17.1 million in the same quarter of 2025, which was primarily due to a\ndecrease in total revenues. Franchise and royalty expenses as a percentage of\ntotal revenues increased by 0.4 percentage points, from 4.9% in the second\nquarter of 2025 to 5.3% in the same quarter of 2026, as a result of higher\nroyalty rate applicable.\n\nImpairment losses of long-lived assets were RMB4.6 million (USD0.7 million)\nfor the three months ended June 30, 2026, compared to RMB9.5 million in the\nsame quarter of 2025, which was primarily due to a decrease in the number of\nplanned closures of underperforming company owned and operated stores in the\nsecond quarter of 2026.\n\nAs a result of the foregoing, operating loss was RMB58.1 million (USD8.6\nmillion) for the three months ended June 30, 2026, compared to RMB47.8 million\nin the same quarter of 2025.\n\nAdjusted Corporate EBITDA was a loss of RMB21.0 million (USD3.1 million) for\nthe three months ended June 30, 2026, compared to a gain of RMB2.2 million in\nthe same quarter of 2025. Adjusted Corporate EBITDA margin was negative 7.6%\nin the second quarter of 2026, compared to positive 0.6% in the same quarter\nof 2025.\n\nChanges in fair value of convertible notes were a loss of RMB34.9 million\n(USD5.1 million) for the three months ended June 30, 2026, compared to a loss\nof RMB23.4 million in the same quarter of 2025.\n\nNet loss was RMB97.4 million (USD14.4 million) for the three months ended June\n30, 2026, compared to RMB75.9 million for the same quarter of 2025. Adjusted\nnet loss, which excludes: (i) share-based compensation expenses of RMB0.3\nmillion (USD0.05 million); (ii) impairment losses of long-lived assets of\nRMB4.6 million (USD0.7 million), (iii) impairment losses of rental deposits of\nRMB2.3 million (USD0.3 million), (iv) loss on disposal of property and\nequipment of RMB0.5 million (USD0.1 million), and (v) loss from changes in\nfair value of convertible notes of RMB34.9 million (USD5.1 million), was\nRMB54.9 million (USD8.1 million) for the three months ended June 30, 2026,\ncompared to RMB39.7 million for the same quarter of 2025. Adjusted net loss\nmargin was negative 20.0% in the second quarter of 2026, compared to negative\n11.4% in the same quarter of 2025.\n\nBasic and diluted loss per ordinary share was RMB3.00 (USD0.44) in the second\nquarter of 2026, compared to RMB2.32 in the same quarter of 2025. Adjusted\nbasic and diluted net loss per ordinary share was RMB1.69 (USD0.25) in the\nsecond quarter of 2026, compared to RMB1.21 in the same quarter of 2025.\n\nLiquidity\n\nAs of June 30, 2026, the total amount of the Company’s cash and cash\nequivalents and restricted cash was RMB121.1 million (USD17.8 million),\ncompared to RMB129.7 million as of December 31, 2025. The change was primarily\nattributable to cash disbursements on business operations, partially offset by\nthe draw-down of additional bank borrowings.\n\nKEY OPERATING DATA\n\n Tims only For the three months ended or as of \n （Exclude the discontinued business) Jun 30, Sep 30, Dec 31, Mar 31, June 30, \n 2025 2025 2025 2026 2026 \n \n Total stores 1,015 1,030 1,047 1,026 1,028 \n Company owned and operated stores 566 551 562 541 544 \n Franchised stores 449 479 485 485 484 \n Made to order (MTO) stores 692 730 770 765 780 \n Non-MTO stores 323 300 277 261 248 \n Same-store sales growth for system-wide stores -4.8 % 1.3 % -2.4 % -13.2 % -17.8 % \n Same-store sales growth for company owned and operated stores -3.6 % 3.3 % -1.4 % -12.4 % -17.3 % \n Registered loyalty club members (in thousands) 26,192 27,900 31,021 35,930 37,118 \n Company owned and operated store contribution (Renminbi in thousands) 27,176 21,786 9,164 3,730 12,584 \n Company owned and operated store contribution margin 9.6 % 7.7 % 3.7 % 1.8 % 5.7 % \n \n\nKEY DEFINITIONS\n* Same-store sales growth. The percentage change in the sales of stores that\nhave been operating for 12 months or longer during a certain period compared\nto the same period from the prior year. The same-store sales growth for any\nperiod of more than a month equals the arithmetic average of the same-store\nsales growth of each month covered in the period. If a store was closed for\nseven days or more during any given month, its sales during that month and the\nsame month in the comparison period are excluded for purposes of measuring\nsame-store sales growth.\n* Net new store openings. The gross number of new stores opened during the\nperiod minus the number of stores permanently closed during the period.\n* System sales. Gross merchandise value of sales generated from both company\nowned and operated stores and franchised stores.\n* Company owned and operated store contribution (previously reported as\nadjusted store EBITDA). Calculated as fully burdened gross profit of company\nowned and operated stores excluding depreciation and amortization.\n* Company owned and operated store contribution margin (previously reported as\nadjusted store EBITDA margin). Calculated as company owned and operated store\ncontribution as a percentage of revenues from company owned and operated\nstores.\n* Adjusted general and administrative expenses. Calculated as general and\nadministrative expenses excluding share-based compensation expenses,\nprofessional fees related to financing programs, and impairment losses of\nrental deposits.\n* Adjusted corporate EBITDA. Calculated as operating loss excluding certain\nnon-cash expenses consisting of depreciation and amortization, share-based\ncompensation expenses, impairment losses of long-lived assets, loss on\ndisposal of property and equipment, professional fees related to financing\nprograms, and impairment losses of rental deposits.\n* Adjusted corporate EBITDA margin. Calculated as adjusted corporate EBITDA as\na percentage of total revenues.\n* Adjusted net loss. Calculated as net loss excluding share-based compensation\nexpenses, impairment losses of long-lived assets, loss on disposal of property\nand equipment, professional fees related to financing programs, impairment\nlosses of rental deposits, and changes in fair value of convertible notes.\n* Adjusted net loss margin. Calculated as adjusted net loss as a percentage of\ntotal revenues.\n* Adjusted basic and diluted net loss per ordinary share. Calculated as\nadjusted net loss attributable to the Company’s ordinary shareholders\ndivided by weighted-average number of basic and diluted ordinary shares.\nRECENT BUSINESS DEVELOPMENT\n\nOn August 13, 2026, Tims China announced the official launch of a joint\nmembership campaign with China Southern Airlines. The two companies will work\ntogether on member benefits integration, consumer touchpoint fusion, and\nservice experience innovation, giving members of both programs a new “coffee\nplus travel” lifestyle experience and expanding the membership service\necosystem.\n\nUSE OF NON-GAAP FINANCIAL MEASURES\n\nThe Company uses non-GAAP financial measures, namely company owned and\noperated store contribution, company owned and operated store contribution\nmargin, adjusted general and administrative expenses, adjusted corporate\nEBITDA, adjusted corporate EBITDA margin, adjusted net loss, adjusted net loss\nmargin, and adjusted basic and diluted net loss per ordinary share in\nevaluating its operating results and for financial and operational\ndecision-making purposes. The Company defines (i) company owned and operated\nstore contribution as fully burdened gross profit of company owned and\noperated stores excluding depreciation and amortization; (ii) company owned\nand operated store contribution margin as company owned and operated store\ncontribution as a percentage of revenues from company owned and operated\nstores; (iii) adjusted general and administrative expenses as general and\nadministrative expenses excluding share-based compensation expenses,\nprofessional fees related to financing programs, and impairment losses of\nrental deposits; (iv) adjusted corporate EBITDA as operating loss excluding\ncertain non-cash expenses consisting of depreciation and amortization,\nshare-based compensation expenses, impairment losses of long-lived assets,\nloss on disposal of property and equipment, professional fees related to\nfinancing programs, and impairment losses of rental deposits; (v) adjusted\ncorporate EBITDA margin as adjusted corporate EBITDA as a percentage of total\nrevenues; (vi) adjusted net loss as net loss excluding share-based\ncompensation expenses, impairment losses of long-lived assets, loss on\ndisposal of property and equipment, professional fees related to financing\nprograms, impairment losses of rental deposits, and changes in fair value of\nconvertible notes; (vii) adjusted net loss margin as adjusted net loss as a\npercentage of total revenues; and (viii) adjusted basic and diluted net loss\nper ordinary share as adjusted net loss attributable to the Company’s\nordinary shareholders divided by weighted-average number of basic and diluted\nordinary shares. The Company believes company owned and operated store\ncontribution, company owned and operated store contribution margin, adjusted\ngeneral and administrative expenses, adjusted corporate EBITDA, adjusted\ncorporate EBITDA margin, adjusted net loss, adjusted net loss margin, and\nadjusted basic and diluted net loss per ordinary share enhance investors'\noverall understanding of its financial performance and allow for greater\nvisibility with respect to key metrics used by its management in its financial\nand operational decision-making.\n\nThese non-GAAP financial measures are not defined under U.S. GAAP and are not\npresented in accordance with U.S. GAAP. As these non-GAAP financial measures\nhave limitations as analytical tools and may not be calculated in the same\nmanner by all companies, they may not be comparable to other similarly titled\nmeasures used by other companies. The Company compensates for these\nlimitations by reconciling the non-GAAP financial measures to the nearest U.S.\nGAAP performance measures, which should be considered when evaluating the\nCompany’s performance. For reconciliation of these non-GAAP financial\nmeasures to the most directly comparable GAAP financial measures, please see\nthe section of the accompanying tables titled, “Reconciliation of Non-GAAP\nMeasures to the Most Directly Comparable GAAP Measures.” The Company\nencourages investors and others to review its financial information in its\nentirety and not rely on any single financial measure.\n\nEXCHANGE RATE INFORMATION\n\nThis earnings release contains translations of certain RMB amounts into U.S.\ndollars (“USD”) at specified rates solely for the convenience of the\nreader. Unless otherwise stated, all translations from RMB to USD were made at\nthe rate of RMB6.7851 to USD1.00, the exchange rate in effect on June 30, 2026\nset forth in the H.10 statistical release of the Federal Reserve Board. The\nCompany makes no representation that the RMB or USD amounts referred could be\nconverted into USD or RMB, as the case may be, at any rate or at all.\n\nCONFERENCE CALL\n\nThe Company will hold a conference call today, on Tuesday, August 18, 2026, at\n8:00 am Eastern Time (on Tuesday, August 18, 2026, at 8:00 pm Beijing Time) to\ndiscuss the financial results.\n\nParticipants are strongly encouraged to pre-register for the conference call,\nby using the weblink provided below.\n\nhttps://register-conf.media-server.com/register/BIe1051e377efc4328b00acdcfb0146d50\n\nParticipants may also view the live webcast by registering through below\nweblink:\n\nhttps://edge.media-server.com/mmc/p/y7354vo8\n\nThe webcast features a ‘Submit Your Question’ tab at the top, where you\nwill have the opportunity to submit your questions before and during the call.\n\nA live and archived webcast of the conference call will also be available at\nthe Company’s Investor Relations website at https://ir.timschina.com under\n“Events and Presentations”.\n\nFORWARD-LOOKING STATEMENTS\n\nCertain statements in this earnings release may be considered forward-looking\nstatements within the meaning of the “safe harbor” provisions of the\nUnited States Private Securities Litigation Reform Act of 1995, such as the\nCompany’s ability to further grow its business and store network, optimize\nits cost structure, improve its operational efficiency, and achieve profitable\ngrowth. Forward-looking statements are statements that are not historical\nfacts and generally relate to future events or the Company’s future\nfinancial or other performance metrics. In some cases, you can identify\nforward-looking statements by terminology such as “believe,” “may,”\n“will,” “potentially,” “estimate,” “continue,”\n“anticipate,” “intend,” “could,” “would,” “project,”\n“target,” “plan,” “expect,” or the negatives of these terms or\nvariations of them or similar terminology. Such forward-looking statements are\nsubject to risks and uncertainties, which could cause actual results to differ\nmaterially from those expressed or implied by such forward looking statements.\nNew risks and uncertainties may emerge from time to time, and it is not\npossible to predict all risks and uncertainties. These forward-looking\nstatements are based upon estimates and assumptions that, while considered\nreasonable by the Company and its management, as the case may be, are\ninherently uncertain and subject to material change. Factors that may cause\nactual results to differ materially from current expectations include various\nfactors beyond management’s control, including, but not limited to, general\neconomic conditions and other risks, uncertainties and factors set forth in\nthe sections entitled “Risk Factors” and “Cautionary Statement Regarding\nForward-Looking Statements” in the Company’s Annual Report on Form 20-F,\nand other filings it makes with the Securities and Exchange Commission.\nNothing in this communication should be regarded as a representation by any\nperson that the forward-looking statements set forth herein will be achieved\nor that any of the contemplated results of such forward-looking statements\nwill be achieved. You should not place undue reliance on forward-looking\nstatements in this communication, which speak only as of the date they are\nmade and are qualified in their entirety by reference to the cautionary\nstatements herein. Except as required by law, the Company expressly disclaims\nany obligations or undertaking to release publicly any updates or revisions to\nany forward-looking statements contained herein to reflect any change in the\nCompany’s expectations with respect thereto or any change in events,\nconditions, or circumstances on which any statement is based.\n\nABOUT TH INTERNATIONAL LIMITED\n\nTH International Limited (Nasdaq: THCH) (“Tims China”) is the parent\ncompany of the exclusive master franchisees of Tim Hortons coffee shops in\nmainland China, Hong Kong and Macau.\n\nThe Company’s philosophy is rooted in world-class execution and data-driven\ndecision making and centered around true local relevance, continuous\ninnovation, genuine community, and absolute convenience. For more information,\nplease visit https://www.timschina.com.\n\nIMPORTANT NOTICE REGARDING THE TIM HORTONS® BRAND\n\nThe TIM HORTONS® brand and related trademarks are used by Tims China pursuant\nto a franchise agreement with Tim Hortons Restaurants International GmbH and\nits affiliates (collectively, the “Identified Persons”). The Identified\nPersons are entities entirely separate and distinct from Tims China and its\nsubsidiaries (the “Group”). No Identified Person exercises any control\nover the business, operations, finances or management of the Group, and no\nIdentified Person is responsible for any obligations or liabilities of the\nGroup.\n\nINVESTOR AND MEDIA CONTACTS\n\nInvestor Relations\n\nIR@timschina.com\n\nPublic and Media Relations\n\nPatty Yu\nPatty.Yu@timschina.com\n\n\n\n TH INTERNATIONAL LIMITED AND SUBSIDIARIES \n UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS \n (Amounts in thousands of RMB and US$, except for number of shares) \n \n As of \n December 31, 2025 June 30, 2026 \n RMB RMB US$ \n \n ASSETS \n Current assets: \n Cash and cash equivalents 121,795 107,833 15,892 \n Restricted Cash 7,916 13,222 1,949 \n Amount due from related parties 195 - - \n Accounts receivable, net 17,692 12,212 1,800 \n Inventories 36,793 32,938 4,854 \n Prepaid expenses and other current assets 142,235 128,813 18,985 \n Total current assets 326,626 295,018 43,480 \n \n Non-current assets: \n Property and equipment, net 332,070 287,164 42,323 \n Intangible assets, net 81,014 72,768 10,725 \n Operating lease right-of-use assets 348,916 268,491 39,571 \n Other non-current assets 88,051 104,193 15,356 \n Total non-current assets 850,051 732,616 107,975 \n Total assets 1,176,677 1,027,634 151,455 \n \n LIABILITIES AND SHAREHOLDERS’EQUITY \n Current liabilities: \n Bank borrowings, current 395,088 448,377 66,083 \n Accounts payable 199,152 180,897 26,661 \n Contract liabilities 37,197 33,229 4,897 \n Amount due to related parties 17,414 53,035 7,816 \n Operating lease liabilities 180,806 169,239 24,943 \n Other current liabilities 172,605 174,358 25,697 \n Total current liabilities 1,002,262 1,059,135 156,097 \n \n Non-current liabilities: \n Convertible notes, at fair value 1,152,723 1,183,734 174,461 \n Contract liabilities 10,133 8,373 1,234 \n Operating lease liabilities 240,282 175,901 25,925 \n Other non-current liabilities 7,712 7,152 1,054 \n Total non-current liabilities 1,410,850 1,375,160 202,674 \n Total liabilities 2,413,112 2,434,295 358,771 \n \n Shareholders’ equity: \n Ordinary shares 10 10 1 \n Additional paid-in capital 1,821,605 1,823,869 268,805 \n Accumulated losses (3,102,994 ) (3,310,359 ) (487,887 ) \n Accumulated other comprehensive income 38,393 72,619 10,704 \n Treasury shares - - - \n Total deficit attributable to shareholders of the Company (1,242,986 ) (1,413,861 ) (208,377 ) \n Non-controlling interests 6,551 7,200 1,061 \n Total shareholders' deficit (1,236,435 ) (1,406,661 ) (207,316 ) \n \n Commitments and Contingencies - - - \n \n Total liabilities and shareholders' deficit 1,176,677 1,027,634 151,455 \n \n\n\n\n TH INTERNATIONAL LIMITED AND SUBSIDIARIES \n UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME/(LOSS) \n (Amounts in thousands of RMB and US$, except for per share data) \n \n For the three months ended June 30, For the six months ended June 30， \n 2025 2026 2025 2026 \n RMB RMB US$ RMB RMB US$ \n Revenues: \n Company owned and operated stores 281,872 220,855 32,550 536,631 428,071 63,090 \n Other revenues 67,104 52,522 7,741 113,087 102,047 15,040 \n Total revenues 348,976 273,377 40,291 649,718 530,118 78,130 \n \n Costs and expenses, net: \n Company owned and operated stores \n Food and packaging 84,807 62,495 9,211 162,279 121,427 17,896 \n Rental and property management fee 56,824 47,943 7,066 113,119 95,142 14,022 \n Payroll and employee benefits 50,227 43,882 6,467 100,247 88,700 13,073 \n Delivery costs 33,338 28,912 4,262 60,379 56,235 8,287 \n Other operating expenses 20,424 17,425 2,568 38,442 35,605 5,248 \n Store depreciation and amortization 26,789 20,406 3,007 55,147 41,992 6,189 \n Company owned and operated store costs and expenses 272,409 221,063 32,581 529,613 439,101 64,715 \n \n Costs of other revenues 46,502 36,804 5,424 78,028 69,852 10,295 \n Marketing expenses 13,906 13,295 1,959 31,335 23,104 3,405 \n General and administrative expenses 37,698 42,261 6,229 89,508 90,305 13,311 \n Franchise and royalty expenses 17,089 14,366 2,117 30,985 27,901 4,112 \n Other operating costs and expenses 98 616 91 1,213 1,175 173 \n Loss on disposal of property and equipment 247 502 74 2,980 1,114 164 \n Impairment losses of long-lived assets 9,485 4,563 673 21,103 10,450 1,540 \n Other income 679 1,986 293 1,965 2,502 369 \n Total costs and expenses, net 396,755 331,484 48,855 782,800 660,500 97,346 \n \n Operating loss (47,779 ) (58,107 ) (8,564 ) (133,082 ) (130,382 ) (19,216 ) \n \n Interest income 983 1,145 169 1,083 1,545 228 \n Interest expenses (4,831 ) (4,285 ) (632 ) (8,407 ) (8,239 ) (1,214 ) \n Foreign currency transaction loss (431 ) (1,337 ) (197 ) (51 ) (2,181 ) (322 ) \n Changes in fair value of convertible notes (23,383 ) (34,857 ) (5,137 ) 6,075 (67,459 ) (9,942 ) \n \n Loss before income taxes (75,441 ) (97,441 ) (14,361 ) (134,382 ) (206,716 ) (30,466 ) \n Income tax expenses (484 ) - - (484 ) - - \n Net loss (75,925 ) (97,441 ) (14,361 ) (134,866 ) (206,716 ) (30,466 ) \n \n Less: Net (loss)/income attributable to non-controlling interests (470 ) 28 4 (1,390 ) 649 96 \n Net loss attributable to shareholders of the Company (75,455 ) (97,469 ) (14,365 ) (133,476 ) (207,365 ) (30,562 ) \n Basic and diluted loss per Ordinary Share (2.32 ) (3.00 ) (0.44 ) (4.10 ) (6.38 ) (0.94 ) \n \n Net loss (75,925 ) (97,441 ) (14,361 ) (134,866 ) (206,716 ) (30,466 ) \n \n Other comprehensive income/(loss) \n Fair value changes of convertible notes due to instrument-specific credit risk, net of nil income taxes (286 ) - - 144 - - \n Foreign currency translation adjustment, net of nil income taxes 2,360 16,156 2,381 3,177 34,226 5,044 \n \n Total comprehensive loss (73,851 ) (81,285 ) (11,980 ) (131,545 ) (172,490 ) (25,422 ) \n \n Less: Comprehensive (loss)/income attributable to non-controlling interests (470 ) 28 4 (1,390 ) 649 96 \n Comprehensive loss attributable to shareholders of the Company (73,381 ) (81,313 ) (11,984 ) (130,155 ) (173,139 ) (25,518 ) \n \n\n\n\n TH INTERNATIONAL LIMITED AND SUBSIDIARIES \n UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS \n (Amounts in thousands of RMB and US$) \n \n For the three months ended June 30, For the six months ended June 30, \n 2025 2026 2025 2026 \n RMB RMB US$ RMB RMB US$ \n Net cash (used in)/provided by operating activities (1,175 ) 33,968 5,006 (1,394 ) 10,424 1,536 \n Net cash used in investing activities (36,715 ) (9,169 ) (1,351 ) (53,373 ) (20,641 ) (3,042 ) \n Net cash (used in)/provided by financing activities 5,900 (13,788 ) (2,032 ) 50,113 4,633 683 \n Effect of foreign currency exchange rate changes on cash (688 ) (1,363 ) (201 ) (825 ) (3,072 ) (453 ) \n Net increase/(decrease) in cash (32,678 ) 9,648 1,422 (5,479 ) (8,656 ) (1,276 ) \n Cash and cash equivalents and restricted cash, at beginning of the period 211,436 111,407 16,419 184,237 129,711 19,117 \n Cash and cash equivalents and restricted cash, at end of the period 178,758 121,055 17,841 178,758 121,055 17,841 \n \n\n\n\n TH INTERNATIONAL LIMITED AND SUBSIDIARIES \n RECONCILIATION OF NON-GAAP MEASURES TO THE MOST DIRECTLY COMPARABLE GAAP MEASURES \n (Unaudited, amounts in thousands of RMB and US$, except for number of shares and per share data) \n \n A. Company owned and operated store contribution \n For the three months ended June 30, For the six months ended June 30， \n 2025 2026 2025 2026 \n RMB % of Revenues - company owned and operated stores RMB US$ % of Revenues - company owned and operated stores RMB % of Revenues - company owned and operated stores RMB US$ % of Revenues - company owned and operated stores \n Revenues - company owned and operated stores 281,872 100.0 220,855 32,550 100.0 536,631 100.0 428,071 63,090 100.0 \n Food and packaging costs - company owned and operated stores (84,807 ) (30.1 ) (62,495 ) (9,211 ) (28.3 ) (162,279 ) (30.2 ) (121,427 ) (17,896 ) (28.4 ) \n Rental expenses - company owned and operated stores (56,824 ) (20.2 ) (47,943 ) (7,066 ) (21.7 ) (113,119 ) (21.1 ) (95,142 ) (14,022 ) (22.2 ) \n Payroll and employee benefits - company owned and operated stores (50,227 ) (17.8 ) (43,882 ) (6,467 ) (19.9 ) (100,247 ) (18.7 ) (88,700 ) (13,073 ) (20.7 ) \n Delivery costs - company owned and operated stores (33,338 ) (11.8 ) (28,912 ) (4,262 ) (13.1 ) (60,379 ) (11.3 ) (56,235 ) (8,287 ) (13.1 ) \n Other operating expenses - company owned and operated stores (20,424 ) (7.2 ) (17,425 ) (2,568 ) (7.9 ) (38,442 ) (7.2 ) (35,605 ) (5,248 ) (8.3 ) \n Store depreciation and amortization (26,789 ) (9.5 ) (20,406 ) (3,007 ) (9.2 ) (55,147 ) (10.3 ) (41,992 ) (6,189 ) (9.8 ) \n Franchise and royalty expenses - company owned and operated stores (9,076 ) (3.3 ) (7,614 ) (1,122 ) (3.4 ) (17,835 ) (3.2 ) (14,648 ) (2,159 ) (3.5 ) \n Fully-burdened gross (loss) profit - company owned and operated stores 387 0.1 (7,822 ) (1,153 ) (3.5 ) (10,817 ) (2.0 ) (25,678 ) (3,784 ) (6.0 ) \n Store depreciation and amortization 26,789 9.5 20,406 3,007 9.2 55,147 10.3 41,992 6,189 9.8 \n \n Company owned and operated store contribution 27,176 9.6 12,584 1,854 5.7 44,330 8.3 16,314 2,405 3.8 \n Company owned and operated store contribution margin 9.6 % 9.6 % 5.7 % 5.7 % 5.7 % 8.3 % 8.3 % 3.8 % 3.8 % 3.8 % \n \n B. Adjusted general and administrative expenses \n For the three months ended June 30, For the six months ended June 30， \n 2025 2026 2025 2026 \n RMB % of Total Revenues RMB US$ % of Total Revenues RMB % of Total Revenues RMB US$ % of Total Revenues \n General and administrative expenses (37,698 ) (10.8 ) (42,261 ) (6,229 ) (15.5 ) (89,508 ) (13.9 ) (90,305 ) (13,311 ) (17.0 ) \n Adjusted for: \n Share-based compensation expenses 749 0.2 320 47 0.1 1,825 0.3 1,836 271 0.3 \n Professional fees related to financing programs - - - - - 1,007 0.2 - - - \n Impairment losses of rental deposits 2,335 0.7 2,347 346 0.9 4,896 0.8 5,440 802 1.0 \n Adjusted General and administrative expenses (34,614 ) (9.9 ) (39,594 ) (5,836 ) (14.5 ) (81,780 ) (12.6 ) (83,029 ) (12,238 ) (15.7 ) \n \n C. Adjusted corporate EBITDA and adjusted corporate EBITDA margin \n For the three months ended June 30, For the six months ended June 30， \n 2025 2026 2025 2026 \n RMB % of Total Revenues RMB US$ % of Total Revenues RMB % of Total Revenues RMB US$ % of Total Revenues \n Operating loss (47,779 ) (13.7 ) (58,107 ) (8,564 ) (21.3 ) (133,082 ) (20.6 ) (130,382 ) (19,216 ) (24.6 ) \n Adjusted for: \n Depreciation and amortization 37,158 10.6 29,423 4,336 10.8 74,171 11.4 60,465 8,911 11.4 \n Share-based compensation expenses 749 0.2 320 47 0.1 1,825 0.3 1,836 271 0.3 \n Impairment losses of rental deposits 2,335 0.7 2,347 346 0.9 4,896 0.8 5,440 802 1.0 \n Professional fees related to financing programs - - - - - 1,007 0.2 - - - \n Impairment losses of long-lived assets 9,485 2.7 4,563 673 1.7 21,103 3.2 10,450 1,540 2.0 \n Loss on disposal of property and equipment 247 0.1 502 74 0.2 2,980 0.5 1,114 164 0.2 \n Adjusted Corporate EBITDA 2,195 0.6 (20,952 ) (3,088 ) (7.6 ) (27,100 ) (4.2 ) (51,077 ) (7,528 ) (9.7 ) \n \n \n D. Adjusted net loss and adjusted net loss margin \n For the three months ended June 30, For the six months ended June 30， \n 2025 2026 2025 2026 \n RMB % of Total Revenues RMB US$ % of Total Revenues RMB % of Total Revenues RMB US$ % of Total Revenues \n Net loss (75,925 ) (21.8 ) (97,441 ) (14,361 ) (35.6 ) (134,866 ) (20.9 ) (206,716 ) (30,466 ) (39.0 ) \n Adjusted for: \n Share-based compensation expenses 749 0.2 320 47 0.1 1,825 0.3 1,836 271 0.3 \n Professional fees related to financing programs - - - - - 1,007 0.2 - - - \n Impairment losses of long-lived assets 9,485 2.7 4,563 673 1.7 21,103 3.2 10,450 1,540 2.0 \n Impairment losses of rental deposits 2,335 0.7 2,347 346 0.9 4,896 0.8 5,440 802 1.0 \n Loss on disposal of property and equipment 247 0.1 502 74 0.2 2,980 0.5 1,114 164 0.2 \n Changes in fair value of convertible notes 23,383 6.7 34,857 5,137 12.7 (6,075 ) (0.9 ) 67,459 9,942 12.7 \n Adjusted Net loss (39,726 ) (11.4 ) (54,852 ) (8,084 ) (20.0 ) (109,130 ) (16.8 ) (120,417 ) (17,747 ) (22.8 ) \n \n E. Adjusted basic and diluted net loss per Ordinary Share \n For the three months ended June 30, For the six months ended June 30， \n 2025 2026 2025 2026 \n RMB Unadjusted and Adjusted Basic and diluted loss per Ordinary Share RMB RMB US$ Unadjusted and Adjusted Basic and diluted loss per Ordinary Share USD RMB Unadjusted and Adjusted Basic and diluted loss per Ordinary Share RMB RMB US$ Unadjusted and Adjusted Basic and diluted loss per Ordinary Share USD \n Net loss attributable to shareholders of the Company (75,455 ) (2.32 ) (97,469 ) (14,365 ) (0.44 ) (133,476 ) (4.10 ) (207,365 ) (30,562 ) (0.94 ) \n Adjusted for: \n Share-based compensation expenses 749 0.02 320 47 0.00 1,825 0.06 1,836 271 0.01 \n Professional fees related to financing programs - - - - - 1,007 0.03 - - - \n Impairment losses of long-lived assets 9,485 0.29 4,563 673 0.02 21,103 0.65 10,450 1,540 0.05 \n Impairment losses of rental deposits 2,335 0.07 2,347 346 0.01 4,896 0.15 5,440 802 0.02 \n Loss on disposal of property and equipment 247 0.01 502 74 0.00 2,980 0.09 1,114 164 0.01 \n Changes in fair value of convertible notes 23,383 0.72 34,857 5,137 0.16 (6,075 ) (0.19 ) 67,459 9,942 0.30 \n Adjusted Net loss attributable to shareholders of the Company (39,256 ) (1.21 ) (54,880 ) (8,088 ) (0.25 ) (107,740 ) (3.31 ) (121,066 ) (17,843 ) (0.55 ) \n Weighted average shares outstanding used in calculating basic and diluted loss per share 32,541,772 N/A 32,519,377 32,519,377 N/A 32,540,993 N/A 32,519,377 32,519,377 N/A \n Adjusted basic and diluted net loss per Ordinary Share (1.21 ) (1.69 ) (0.25 ) (3.31 ) (3.72 ) (0.55 ) \n \n\n\n\n(https://www.globenewswire.com/NewsRoom/AttachmentNg/2202805b-cc31-455b-bc26-27a341f4d1bc)\n\n\n\nGlobeNewswire, Inc. 2026"},"type":"article","timestamp":"2026-08-18T09:30:00.628658317Z","server_sent_at_ms":1787045400628},"received_at":"2026-08-18T09:30:00.995Z","source_url":null},"analysis":{"id":"110253","press_release_id":"121267","analysis_json":{"industry":{"label":"Hotels, Restaurants & Leisure","sector":"Consumer Discretionary"},"redFlags":["Revenue decreased 21.7% year-over-year","Store contribution margin compressed to 5.7% from 9.6% in the prior year","Net loss widened to RMB97.4 million","Cash balance declined to RMB121.1 million"],"eventType":"earnings","narrative":"Tims China reported Q2 2026 revenue of RMB273.4 million ($40.3 million), down 21.7% year-over-year, with a net loss of RMB97.4 million ($14.4 million) widening from the prior year.\n\nOperational performance was impacted by proactive store closures and a 17.3% decline in same-store sales for company-owned stores, causing store contribution margin to halve to 5.7%.\n\nTo support operations, the company closed a $15.8 million tranche of convertible notes from brand owner THRI and launched a joint membership campaign with China Southern Airlines.","sentiment":"bearish","agentHooks":{"shouldPost":true,"suggestedAngle":"Turnaround efforts intensify as Tims China posts a sharp revenue decline and margin compression, relying on brand owner financing."},"keyFigures":{"revenue":"$40.3 million","revenueYoy":"-21.7%","customDimensions":{"net_loss":"RMB97.4 million","system_sales":"RMB347.8 million","net_new_stores":2,"loyalty_members":"37.1 million","store_contribution_margin":"5.7%"}},"quotedText":"The second quarter was a period of transition for Tims China. Our top-line results were impacted by our proactive decision to close underperforming stores, as well as pressure on same-store sales as we lapped strong delivery performance from last year.","namedEntities":{"people":[{"name":"Mr. Kwok Wah (John) Cheung","role":"CEO"},{"name":"Mr. Dong (Albert) Li","role":"CFO"}],"products":["Tim Hortons coffee shops","Made-to-order (MTO) stores"],"companies":[{"name":"TH International Limited","ticker":"THCH"},{"name":"Tim Hortons Restaurants International GmbH","relationship":"brand owner and founding shareholder"},{"name":"China Southern Airlines","relationship":"partner"}],"dollarAmounts":[{"amount":"$40.3 million","context":"Q2 2026 total revenue"},{"amount":"$15.8 million","context":"initial tranche of senior secured convertible notes"},{"amount":"$14.4 million","context":"Q2 2026 net loss"},{"amount":"$17.8 million","context":"cash and cash equivalents and restricted cash as of June 30, 2026"}]},"materialImpact":{"score":4,"reasoning":"Revenue declined 21.7% year-over-year and net loss widened significantly amidst a strategic 'transition' involving store closures and margin compression. The company also required emergency financing from its brand owner."},"tickerRelevance":{"others":[],"primary":"THCH"},"globalImportance":25,"audienceRelevance":25,"eventTypeSecondary":["debt_offering","partnership"],"importanceComponents":{"tickerTier":"small-cap","eventGravity":"earnings-miss","sectorWeight":"consumer-discretionary"}},"event_type":"earnings","event_type_secondary":["debt_offering","partnership"],"sentiment":"bearish","material_impact_score":4,"narrative":"Tims China reported Q2 2026 revenue of RMB273.4 million ($40.3 million), down 21.7% year-over-year, with a net loss of RMB97.4 million ($14.4 million) widening from the prior year.\n\nOperational performance was impacted by proactive store closures and a 17.3% decline in same-store sales for company-owned stores, causing store contribution margin to halve to 5.7%.\n\nTo support operations, the company closed a $15.8 million tranche of convertible notes from brand owner THRI and launched a joint membership campaign with China Southern Airlines.","key_figures":{"revenue":"$40.3 million","revenueYoy":"-21.7%","customDimensions":{"net_loss":"RMB97.4 million","system_sales":"RMB347.8 million","net_new_stores":2,"loyalty_members":"37.1 million","store_contribution_margin":"5.7%"}},"named_entities":{"people":[{"name":"Mr. Kwok Wah (John) Cheung","role":"CEO"},{"name":"Mr. Dong (Albert) Li","role":"CFO"}],"products":["Tim Hortons coffee shops","Made-to-order (MTO) stores"],"companies":[{"name":"TH International Limited","ticker":"THCH"},{"name":"Tim Hortons Restaurants International GmbH","relationship":"brand owner and founding shareholder"},{"name":"China Southern Airlines","relationship":"partner"}],"dollarAmounts":[{"amount":"$40.3 million","context":"Q2 2026 total revenue"},{"amount":"$15.8 million","context":"initial tranche of senior secured convertible notes"},{"amount":"$14.4 million","context":"Q2 2026 net loss"},{"amount":"$17.8 million","context":"cash and cash equivalents and restricted cash as of June 30, 2026"}]},"model_name":"glm-4.7","prompt_hash":"sha256:727b4b9429a443af","schema_hash":"sha256:05005c02d9cffac9","created_at":"2026-08-18T09:32:14.978Z","global_importance":25,"audience_relevance":25,"importance_components":{"tickerTier":"small-cap","eventGravity":"earnings-miss","sectorWeight":"consumer-discretionary"}},"durationMs":133965,"modelName":"glm-4.7"}}