According to Financial Channel APP, on the evening of November 12, global famous chain coffee brand tim Hortons China (THCH.US) released the third-quarter financial report for 2024. The financial report shows that the company's third-quarter revenue reached 0.36 billion yuan, and the adjusted EBITDA at the self-operated store level was 39.92 million yuan, a year-on-year increase of 37.6%. The adjusted EBITDA margin was 13.3%, reaching a quarterly historical high. At the same time, Tim's Tianhao China's adjusted EBITDA for the third quarter was 2 million yuan, with two consecutive quarters of positive performance, maintaining a profitable track.

During the reporting period, Tim's Tianhao China, based on the principle of 'ultimate convenience,' further opened single-store franchises nationwide (excluding special areas). At the same time, relying on continuous product innovation, strengthening the differentiated operational feature of 'coffee + warm food,' and achieving efficient growth in store network and user scale. According to the financial report, as of September 30, 2024, the number of stores nationwide reached 946, covering 77 cities, with a total of 22.8 million registered brand members.

Industry analysis believes that in the context of intense competition in the Chinese coffee industry, Tim's Tianhao China focuses on differentiated brand positioning to achieve continuous improvement in operational efficiency and profitability. Its operating strategy and market approach have withstood the market test, and with the expansion of scale advantages, it is expected to unleash greater development potential in the future.

Significant improvement in operational efficiency, self-operated stores contributing to record profit margins after adjustment.

Facing increasingly fierce industry competition, Tim's Tianhao China aims for high-quality sustainable development, focusing on differentiated brand positioning and focusing on the dual enhancement of scale and operational efficiency. In terms of store expansion, guided by the principle of 'ultimate convenience,' the company combines self-operation with a variety of franchise strategies to increase store density and meet consumer needs in different scenarios.

In the third quarter, Tim's Tianhao China deepened its focus on partnering franchise tracks, further opening single-store franchises nationwide (excluding special areas), and expanding coverage to new cities such as Harbin, Shijiazhuang, Yancheng, Dongying, Heze, and Huangshi. By September 30, 2024, the total number of single-store franchises opened had reached 43, covering 13 provinces. Benefiting from this, Tim's Tianhao China's store scale achieved high-quality steady expansion. By September 30, 2024, Tim's Tianhao China had a total of 946 stores nationwide, covering 77 cities.

It is worth mentioning that Tim's Tianhao China fully leverages its brand advantages to empower partner store performance. Through professional management training, it helps stores operate with high quality; a nationwide supply chain system provides strong support, ensuring timely supply of fresh raw materials to stores, continuously improving the quality of 'coffee + warm food' products and store service levels. With accumulated brand influence and high-quality products and services, newly opened stores in new cities quickly gained consumer welcome and support. For example, the first store in Harbin achieved sales exceeding 0.1 million yuan within the first three days of opening.

At the same time, Tim's Tims China has made significant progress in greatly improving operational efficiency by enhancing supply chain management and empowering digital technology. The third-quarter financial report shows that at the company-operated store level, the proportion of food and packaging expenses decreased from 35.1% year-on-year to 29.0%, labor costs decreased from 19.9% year-on-year to 16.9%, and the proportion of other store operating expenses decreased from 9.0% year-on-year to 7.9%. At the company headquarters level, with the improvement of brand strength, the proportion of marketing expenses decreased by 2.3 percentage points year-on-year. The adjusted headquarters management expenses ratio decreased by 2.7 percentage points year-on-year.

Benefiting from the expansion of scale and the improvement of operational efficiency, Tim's Tims China's profitability steadily increased. Adjusted EBITDA at the self-operated store level was 39.92 million yuan, a year-on-year increase of 37.62%. The adjusted EBITDA ratio at the self-operated store level was 13.3%, reaching a single-season historical high. The company-level adjusted EBITDA turned positive for two consecutive quarters, continuing on a profitable track.

Upgrade brand new propositions, building high barriers to competition with 'coffee + warm meal.'

After 5 years of deep cultivation in the Chinese market, Tim's Tims China, with a differentiated layout of 'coffee + warm meal,' stands out in the coffee market, continues to gain consumer favor, and is called 'the bagel expert' by consumers. Recently, the company officially announced a new brand proposition of "fresh means delicious, healthy and low burden," launching a brand-new model of "order-now-make-on-the-spot" counter, focusing on 'fresh' and 'healthy' as top priorities, providing consumers with healthier and higher-quality products and services, further solidifying the brand's leading position in the coffee and warm meal fields. At the same time, Tim's Tims China continues to engage in creative joint marketing, achieving rapid increase in user preference and brand influence.

According to reports, Tim's Tims Coffee recently launched a new model of 'order-now-make-on-the-spot' counter, with warm meal products freshly made immediately after customers order; meanwhile, introduced bagel meal sets of less than 400 calories after customer orders, balancing meals to reduce calorie intake for customers. In addition, the full line of drinks promises '5 zeros'—0 plant fat powder, 0 milk powder, 0 hydrogenated vegetable oil, 0 trans fatty acids, and super cost-effective sets of 14.9 yuan and 19.9 yuan, committed to bringing consumers a high-quality, high-cost-effective, and high-convenience consumption experience.

During the period, Tim's Tims Coffee held the second Bagel Festival, collaborating with 'Chief Bagel Recommendations Officer' Meng Lan, themed 'healthy and delicious, bagels freedom,' and launched five new products: Five Red Bagels, Five Black Bagels, Roast Beef and Bacon Bagel Burgers, and Apple Cinnamon Latte. So far, Tim's Tims Coffee has created a complete bagel universe, including the healthy and nutritious 'cereal bagel' series, the delicious and light burden 'smile bagel' series, and the instantly energizing 'bagel burger' line, covering all-weather warm meal consumption scenarios.

In addition, Tim's Tims Coffee also offers multiple discounts, including the 'Cereal Bagel Six Card,' 'Smile Bagel Three Card,' new member 8.8 yuan to try popular cereal bagels; there are also Meng Lan limited edition paper bags, bagel packaging boxes, bagel coaster paper, and other peripheral products.

Thanks to product innovation and Meng Lan's support, the second Bagel Festival received a total of 63 million exposures. In September, searches for Tim's Tims Coffee bagels doubled, significantly boosting Tim's Tims Coffee's brand ranking and sales growth in the coffee industry. In line with the 'coffee + warm meal' strategy, Tim's Tims Coffee's 'Eat Full Card' also achieved great success, selling over 120,000 cards in the third quarter, increasing the average purchase frequency of card members by 4.6 times.

Industry analysis believes that Tim's good weather in China's 'coffee + hot food' has become its important growth strategy. On the basis of the 'made-to-order' model, it has launched more products related to health concepts, catering to the continuously upgrading health needs of Chinese consumers, achieving brand recognition and increasing user stickiness, and is expected to drive its access to greater development space.

According to the financial report, as of September 30, 2024, the number of registered members reached 22.8 million, a year-on-year increase of 35.3%. The average number of members per store has exceeded 24,000, effectively promoting brand sales growth.

Looking ahead, Tim's good weather China CEO Lu Yongchen said: 'In the future, the company's strategic focus is to firmly implement established development plans, continue to implement the brand new proposition of 'fresh and delicious, healthy and low burden', provide value-for-money healthy food; At the same time, steadily expand the store network, optimize the supply chain efficiency, bring consumers a high-quality, high cost-effective, highly convenient consumer experience, enhance brand attractiveness, expand brand scale, improve store efficiency, achieve high profitability, efficient capital utilization growth goals.'