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01/11 03:34
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call summary provides a balanced view: there is an emphasis on customer and employee focus, technological advancements, and AI, which are positive. However, the lack of specific financial guidance, vague responses in the Q&A, and no new partnerships or significant strategic shifts contribute to a neutral sentiment. The company's focus on quality over speed and stable growth of new brands are positive, but the absence of aggressive expansion or clear financial targets tempers expectations, leading to a neutral stock price prediction.
Revenue Q3 revenue reached USD 214 million, a year-over-year increase of 7.8%. Haidilao restaurant operating revenue was USD 201 million, up 5.1% year-over-year. Takeaway revenue reached USD 4.4 million, a 69.2% rise from the previous year. Other business revenue stood at USD 8.9 million, a 74.5% increase.
Operating Profit Operating profit was USD 12.64 million, a decrease of USD 2.3 million or 15.4% compared to the same period last year. The operating profit margin was 5.9%, down 1.6 percentage points year-over-year. However, operating profit increased by USD 8.9 million or 240.5% compared to Q2, and the operating profit margin rose by 4 percentage points from Q2.
Net Profit After Tax Net profit after tax was USD 3.59 million, a sharp decline from USD 37.6 million last year. This was due to exchange rate fluctuations causing a foreign exchange loss of USD 5.8 million compared to a gain of USD 25.8 million in the same period last year.
Operating Cash Flow Operating cash flow in Q3 was USD 34.1 million, down USD 6.5 million from last year. This was due to cyclical fluctuations in operating receivables, lower operating profit, and the profit-sharing scheme.
Customer Metrics Approximately 8.1 million customers were served in Q3, representing a 9.5% rise year-over-year. The daily table turnover rate was 3.9 rounds, 0.1 rounds higher than last year. Average order value was USD 24.6, down USD 1.2 from USD 25.8 last year due to strategic adjustments in menu pricing and marketing. Average daily revenue per restaurant was USD 18,000, a USD 300 increase from last year.
Regional Performance East Asia served 1.2 million customers, a 50% increase from last year, with a table turnover rate of 4.9 rounds (up 0.6 rounds) and an average spending per person of USD 28.9. North America had a table turnover rate of 4 rounds (up 0.1), with average daily revenue per restaurant increasing by 2.8% to USD 22,100. Southeast Asia's table turnover rate was 3.7 (up 0.1), driven by increased investment in customer rewards and cost-effective products. Other regions had a table turnover rate of 3.7 rounds, with new stores in the UAE still ramping up.
Same-Store Revenue Same-store revenue grew by 2.7%. The average table turnover rate across 107 stores was 4 rounds daily, an increase of 0.1 year-over-year. Average spending per customer decreased by USD 1.1.
Costs and Expenses Raw material costs totaled USD 71.2 million, with a gross profit margin of 66.7%, down 0.3 percentage points year-over-year. Employee costs were USD 71 million, representing 33.2% of revenue, an increase of 0.1 percentage points year-over-year. Rent and related expenses were USD 6.12 million, 2.9% of revenue, up 0.2 percentage points year-over-year. Depreciation and amortization totaled USD 21 million, about 10% of revenue, a decline of 0.3 percentage points from last year. Utility expenses were USD 7.8 million, 3.6% of revenue, a 0.2 percentage point decrease year-over-year. Operating expenses, including travel and other costs, were USD 23.7 million, up 11.1%, an increase of 1.7 percentage points year-over-year.
Fresh-cut meat products: Launched in over 60% of stores, with adoption rate surpassing 11%, leading to higher per table consumption and positive feedback.
Nightclub-style theme renovation: Implemented in some Southeast Asia stores, resulting in significant increase in table turnover rate during late-night hours.
New brand launches: Hi Bowl malatang brand launched in Canada and became profitable at the store level. Sparkora BBQ store opened in Indonesia and an Izakaya in Japan, both showing growth.
New store openings: Opened 2 new Haidilao stores in Malaysia and Indonesia. Signed contracts for over 10 new stores, with plans to open more in Q4.
Store adjustments: Discontinued 1 store in Singapore and adjusted 1 store in Thailand to a secondary brand due to changes in the business district and customer base.
Operational efficiency improvements: Reduced headquarters oversight, eliminated performance ranking, and focused on support and guidance for stores, leading to better market and employee focus.
Technology integration: Adopting IT and smart middle office systems to support management and expansion.
Pomegranate plan: Advancing second international brand and exploring strategies for customer flow, products, and operations.
Woodpecker plan: Focused on underperforming stores to improve performance.
AI integration: Plans to adopt AI to boost organizational efficiency.
Operating Profit Decline: Operating profit decreased by USD 2.3 million or 15.4% year-over-year, with the operating profit margin dropping by 1.6 percentage points. This indicates challenges in balancing customer benefits with operational efficiency.
Foreign Exchange Loss: The company experienced a foreign exchange loss of USD 5.8 million due to currency fluctuations, significantly impacting net profit, which dropped sharply from USD 37.6 million to USD 3.59 million year-over-year.
Increased Operating Expenses: Operating expenses rose by 11.1% year-over-year, driven by higher outsourcing service fees, professional consulting fees, and brand marketing costs, as well as costs related to the Pomegranate project and brand building.
Rental Costs: Rental costs increased to 2.9% of revenue due to a higher number of leased properties, including renovations and short-term warehouse leases, adding financial pressure.
Decline in Average Transaction Value: The average transaction value per customer decreased in multiple regions, including a $1.2 drop globally and a $4.4 drop in North America, reflecting potential pricing or customer spending challenges.
Supply Chain and Efficiency Challenges: While efficiency gains and supply chain enhancements were noted, gross profit margin declined by 0.3 percentage points year-over-year, indicating room for improvement in cost management.
Store Closures and Adjustments: The company closed 6 stores and adjusted 1 store to a secondary brand, reflecting challenges in certain markets or locations.
Currency and Regional Risks: Currency fluctuations in regions like Japan, Singapore, and the UK negatively impacted financial performance, highlighting exposure to regional economic conditions.
Future Store Openings: The company anticipates opening a few new Haidilao stores in Q4 2025, resulting in a total of over 10 new stores opened this year. Contracts have been signed for more than 10 additional stores that are not yet open.
Expansion of Second Brand: The malatang brand, Hi Bowl, launched in Canada and quickly became profitable at the store level. The company plans to refine customer flow, products, and operations to support gradual regional expansion using information technology and smart middle office systems.
New Concepts and Innovations: The company opened a Sparkora BBQ store in Indonesia and an Izakaya in Japan in November 2025, both showing consistent growth. The company plans to continue adjustments and innovations to tackle global market challenges.
Operational Efficiency and Technology Integration: The company aims to adopt new technologies and integrate AI to boost organizational efficiency. This includes leveraging mentorship systems and adjusting incentive policies to attract and retain employees globally.
Customer Experience Enhancements: The company plans to expand the fresh-cut meat scenario to provide a richer dining experience. Over 60% of stores have launched these products, with adoption rates surpassing 11%. Additionally, nightclub-style theme renovations in Southeast Asia stores have led to increased table turnover during late-night hours.
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