Chagee Holdings Limited American Depositary SharesCHA
Mentioned
Impact on stocks 1
Consumer Discretionary
Chagee Holdings Limited American Depositary SharesChagee Holdings reported second-quarter results showing overseas GMV surged 114.3% year over year to RMB 504.0 million, while total GMV fell 3.3% sequentially to RMB 7,660.3 million, with Greater China GMV dropping 4.5% sequentially. The company's South Korea debut saw three teahouses sell over 16,000 cups in three days, and it now operates in eight overseas markets. GAAP operating income jumped 387.6% to RMB 524.7 million, pushing the operating margin to 15.4% from 3.2% a year earlier, and the company extended its streak to 14 consecutive quarters of positive net income. However, Greater China faced headwinds: franchised teahouse revenue fell 18.1%, average monthly GMV per teahouse slid to RMB 338,259 from RMB 356,080, and active members shrank to 47.1 million from 50.0 million. CEO Junjie Zhang noted the fresh milk tea category is "crowded with more players," and COO Aiden Yin said same-store sales in July were still down in the low single digits. The company has bought back roughly $30 million of stock under its $150 million authorization and is weighing a regular dividend.