CHA

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management characterizes the tea beverage industry as undergoing a structural shift from shared growth to intense competition over a fixed market base. The company is pivoting from high-profile marketing to a 'gentle touch point' strategy focused on individual self-expression and consumer comfort. Performance attribution for the quarter centers on organizational restructuring and a systematic review of the product roadmap to stabilize the business. Strategic positioning involves moving beyond core loose-leaf fresh milk tea into specialty deals, lattes, and gelato to meet diversifying consumer needs. Management emphasizes a return to fundamentals, prioritizing the perfection of every consumer touchpoint over rapid scale expansion in a volatile macro environment. The company is upgrading its middle-office infrastructure, including IT and channel capabilities, to support resource mobilization for new product categories. Management views 2026 as a year of 'adjustment and stabilization,' with the second half focused on executing learnings from first-half pilot programs. The product strategy for the remainder of the year assumes a consistent launch cadence and continued enhancement of healthy ingredients like sugar and dairy bases. Overseas expansion remains a primary growth engine, with plans to continue disciplined entry into new markets following a successful South Korean launch. The company expects same-store sales to turn positive year-over-year in August, driven by peak summer seasonality and the rollout of the gelato series. Operational focus will shift toward upgrading teahouse equipment to ensure product consistency and improve overall operating efficiency. The non-GAAP G&A expense ratio declined to 9.1% from 13.2% year-over-year, reflecting a more disciplined approach to resource allocation and headcount optimization. A share repurchase program of up to USD 150 million is underway, with approximately USD 30 million executed as of late August 2026. The company reported its 14th consecutive quarter of positive net income, citing the durability of recent cost structure and organizational efficiency gains. Management is currently evaluating a transition toward a more regular and sustainable shareholder return mechanism, such as regular dividends. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. CEO Junjie Zhang stated the core objective is building a foundation for sustainable growth rather than pursuing rapid scale expansion. The company will focus on practical execution of first-half explorations in new categories and user experience upgrades. COO Aiden Yin noted that July same-store sales showed a low single-digit decline, a meaningful improvement from the first half of the year. Recovery is attributed to the success of the new product strategy, specifically the Guava Peach Iced tea and the expansion of the gelato pilot to 190 teahouses. CFO Aaron Huang confirmed that healthy free cash flow is providing a foundation to explore regular dividends beyond special payouts. Management is currently evaluating specific details for a proposal to the Board, though no definitive timeline for a regular dividend was provided.

Interested in Chagee Holdings Limited - Sponsored ADR? Here are five stocks we like better. Profitability surged despite modest growth: Q2 revenue rose 2.5% year over year to RMB 3.41 billion, while GAAP net income climbed to RMB 464.8 million, lifting the net margin to 13.6% from 2.3%. China demand softened, but overseas expansion accelerated: Greater China GMV fell 4.5% sequentially, while international GMV increased 18.2% sequentially and 114.3% year over year. Chagee expanded to 7,639 tea houses across eight overseas markets, including a new entry into South Korea. Management is prioritizing stabilization and efficiency: Cost controls supported stronger operating margins as the company launched new products and expanded membership engagement. Chagee expects same-store sales to improve toward positive year-over-year growth in August and has repurchased about $30 million of shares while evaluating regular dividends. Chagee (NASDAQ:CHA) reported second-quarter 2026 revenue growth and sharply higher profitability as the tea beverage company navigated a softer macroeconomic backdrop and intensifying competition in its core market. Total revenue rose 2.5% year over year to RMB 3.41 billion, while GAAP net income reached RMB 464.8 million, producing a 13.6% net income margin compared with 2.3% a year earlier. Non-GAAP net income was RMB 488.7 million, or a 14.3% margin, which was flat sequentially. The company said it has now recorded positive net income for 14 consecutive quarters. → Quantum Computing Is Raising the Stakes for Cybersecurity: 5 Stocks to Watch “Even as top line growth moderated, we maintained the operating discipline we established earlier this year and our profitability held largely intact,” CFO Aaron Huang said. He said the results indicated that cost-structure and organizational-efficiency improvements were durable rather than one-time measures. Total gross merchandise value was RMB 7.66 billion in the quarter, down 3.3% from the first quarter. Greater China GMV declined 4.5% sequentially to RMB 7.16 billion, while average monthly GMV per tea house in the region fell to RMB 338,259 from RMB 356,080 in the prior quarter. → Palantir's Kool-Aid Moment: The Math Behind Karp's Forecast Overseas markets remained a growth driver. International GMV totaled RMB 504 million, rising 18.2% sequentially and 114.3% year over year. Chagee’s network totaled 7,639 tea houses as of June 30, up from 7,038 a year earlier and 108 more than in the preceding quarter. The network included 7,240 locations in Greater China and 399 overseas, with 6,756 franchisee-operated tea houses and 883 company-owned locations. The company entered South Korea during the quarter, opening three tea houses in Seoul. Those locations sold more than 16,000 cups combined over their first three days, while app downloads before their openings exceeded 46,000, according to COO Aiden Yin. Average daily cup volume per Seoul tea house reached 1,648 in May. → Looking Beyond NVIDIA? These 3 AI ETFs Are Beating the Market Chagee said it operates in eight overseas markets, including Singapore, Malaysia, Thailand, Indonesia, the Philippines, Vietnam, the United States and South Korea. Management said the company introduced 17 products during the quarter, its highest number of launches in a single quarter. The lineup expanded beyond its Original Leaf Fresh Milk Tea offerings to include special deals, Lemon Tea Latte, Matcha Latte and Geelato. The relaunched Melon Oolong Tea Milk sold an average of 110 cups per tea house per day in its first week and accounted for nearly 20% of cup sales, Yin said. The return of Longjing Tea Latte helped lift GMV nearly 25% sequentially during the Tomb Sweeping Day period. Chagee also piloted Geelato, a product combining loose tea leaves with Italian gelato craftsmanship, in selected locations. By August, Geelato had been introduced to more than 190 tea houses. The company said recent pilot-store results showed offline-channel GMV increasing more than 20%, while the product helped attract new customers, reactivate dormant members and increase store traffic. Registered members totaled 257 million at the end of June. The repurchase rate among active members remained above 43%, and members making two or more purchases represented more than 78% of total orders. Gross profit, calculated excluding material, storage and logistics costs from revenue, was RMB 1.84 billion, resulting in a 54% gross margin that was unchanged from a year earlier. Operating income rose to RMB 524.7 million, representing a 15.4% margin, compared with a 3.2% margin in the prior-year period. On a non-GAAP basis, operating income was RMB 548.6 million, or a 16.1% margin, down from 17.1% in the first quarter. Non-GAAP sales and marketing expenses were 8.8% of revenue, versus 10.6% a year earlier and 8.6% in the first quarter. Non-GAAP general and administrative expenses were 9.1% of revenue, versus 13.2% a year earlier and 11.6% in the first quarter. Company-owned tea house operating costs rose 207.8% year over year to RMB 566.8 million, reflecting continued network development. Cash, cash equivalents, restricted cash and time deposits totaled RMB 6.80 billion at quarter-end. CEO Junjie Zhang said Chagee views 2026 as “a year of adjustment and stabilization,” rather than a period focused on rapid expansion. Management said its priorities include product-category exploration, consumer-experience upgrades, operational improvements and disciplined overseas expansion. For the third quarter, Yin said same-store sales showed a low-single-digit year-over-year decline in July, which he characterized as a meaningful improvement from the first half. Based on trends through the call, the company expected same-store sales to turn positive year over year in August. Chagee also continued its shareholder-return initiatives. Zhang said the company had repurchased about $30 million of shares as of Aug. 24 under its previously announced authorization of up to $150 million. Huang said management and the board were reviewing possible regular dividend plans, following a $177 million special dividend paid in the fourth quarter of the prior year. Our Mission With every cup of our tea, we aspire to foster a global connection of people and cultures. Our Vision To modernize the tea-drinking experience through technology and innovation. Our Core Values “Customer First” is the foundational philosophy of how we make decisions and run our business. “Caring for Partners” is the core value that defines how we interact with consumers, franchise partners, suppliers, and employees. “Quality, Health, and Convenience” is the guiding principle of how we make our products. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Chagee Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

SHANGHAI, Aug. 28, 2026 (GLOBE NEWSWIRE) -- Chagee Holdings Limited (NASDAQ: CHA) (“Chagee” or the “Company”), a leading premium tea drinks brand serving healthy and delicious freshly-made tea drinks, today announced its unaudited financial results for the second quarter ended June 30, 2026. Second Quarter 2026 Operational Highlights1 As of June 30, 2026, there were 7,639 teahouses within the Company’s teahouse network in Greater China and overseas, representing an 8.5% increase in the number of teahouses as of June 30, 2025. Total GMV generated in the second quarter of 2026 was RMB7,660.3 million. Geographically, total GMV generated in overseas markets was RMB504.0 million in the second quarter of 2026, representing a 114.3% year-over-year increase; total GMV generated in Greater China market was RMB7,156.3 million, compared to RMB7,867.9 million in the same quarter of 2025. Average monthly GMV per teahouse in Greater China was RMB338,259 in the second quarter of 2026, compared to RMB356,080 in the first quarter of 2026. Chagee had 47.1 million active members in the second quarter of 2026, compared to 50.0 million in the first quarter of 2026. Second Quarter 2026 Financial Highlights Net revenues increased by 2.5% to RMB3,414.6 million (US$503.3 million) from RMB3,331.9 million in the same quarter of 2025. Operating income increased by 387.6% to RMB524.7 million (US$77.3 million) from RMB107.6 million in the same quarter of 2025. GAAP net income was RMB464.8 million (US$68.5 million), compared to RMB77.2 million in the same quarter of 2025. Non-GAAP net income, which adjusts for share-based compensation expenses in the amount of RMB23.9 million, was RMB488.7 million (US$72.0 million), compared to RMB629.8 million in the same quarter of 2025. Second Quarter 2026 Financial Results Total net revenues increased by 2.5% to RMB3,414.6 million (US$503.3 million) from RMB3,331.9 million in the same quarter of 2025. Net revenues from franchised teahouses in the second quarter of 2026 were RMB2,474.0 million (US$364.6 million), compared to RMB3,020.7 million in the same quarter of 2025. This was mainly attributable to a decrease in total GMV in Greater China resulting from the economic headwinds as well as intense industry competition. Net revenues from franchised teahouses represented 72.5% of the Company’s total net revenues for the second quarter of 2026. Net revenues from company-owned teahouses in the second quarter of 2026 were RMB940.6 million (US$138.6 million), increasing from RMB311.2 million in the same quarter of 2025. The increase was mainly attributable to the change in the Company’s teahouse composition in Greater China and the expansion of overseas teahouse network. Net revenues from company-owned teahouses represented 27.5% of the Company’s total net revenues for the second quarter of 2026. Total operating expenses were RMB2,889.9 million (US$425.9 million), representing a 10.4% decrease from RMB3,224.3 million in the same quarter of 2025. Cost of materials, storage and logistics was RMB1,571.2 million (US$231.6 million), representing an increase of 2.2% from RMB1,536.8 million in the same quarter of 2025, generally in line with overall revenue growth. Company-owned teahouse operating costs were RMB566.8 million (US$83.5 million), representing an increase of 207.8% from RMB184.1 million in the same quarter of 2025. The increase mainly resulted from the increase in the number of company-owned teahouses, which led to higher payroll, store rental, utilities, and other store operating expenses. Other operating costs were RMB115.8 million (US$17.1 million), representing a decrease of 33.3% from RMB173.7 million in the same quarter of 2025. This was mainly due to a decrease of RMB30.2 million in payroll expenses driven by organizational structure adjustments and headcount optimization. Other operating costs as a percentage of total net revenues were 3.4%, compared to 5.2% in the same quarter of 2025. Sales and marketing expenses were RMB301.5 million (US$44.4 million), representing a decrease of 21.7% from RMB385.0 million in the same quarter of 2025. This was mainly driven by decreases of (i) RMB30.7 million in share-based compensation expenses for sales and marketing staff; (ii) RMB31.1 million in payroll expenses (excluding share-based compensation expenses), both resulting from the streamlined branding and marketing team; and (iii) RMB14.0 million in advertising expenses supported by improved efficiency in advertising placements and precision marketing initiatives. Sales and marketing expenses as a percentage of total net revenues were 8.8%, compared to 11.6% in the same quarter of 2025. General and administrative expenses were RMB334.5 million (US$49.3 million), representing a decrease of 64.6% from RMB944.6 million in the same quarter of 2025. The decrease was primarily driven by decreases of (i) RMB482.7 million in share-based compensation expenses for administration, research and development staff; (ii) RMB48.0 million in payroll expenses (excluding share-based compensation expenses) and RMB30.2 million in rental, utilities, office and travelling expenses, both resulting from the streamlined administration and research team; and (iii) RMB28.6 million in professional service fees, primarily due to the service fees incurred in connection with the Company’s initial public offering in the second quarter of 2025. General and administrative expenses as a percentage of total net revenues were 9.8%, compared to 28.3% in the same quarter of 2025. Net income was RMB464.8 million (US$68.5 million) in the second quarter of 2026, representing a net income margin of 13.6%, compared to RMB77.2 million, or a net income margin of 2.3%, in the same quarter of 2025. Non-GAAP net income was RMB488.7 million (US$72.0 million) in the second quarter of 2026, representing a non-GAAP net income margin of 14.3%, compared to RMB629.8 million, or a non-GAAP net income margin of 18.9%, in the same quarter of 2025. Basic net income per ordinary share was RMB2.44 (US$0.36) in the second quarter of 2026, compared to RMB0.36 in the same quarter of 2025. Diluted net income per ordinary share was RMB2.42 (US$0.36) in the second quarter of 2026, compared to RMB0.35 in the same quarter of 2025. Non-GAAP basic net income per ordinary share was RMB2.57 (US$0.38) in the second quarter of 2026, compared to RMB3.35 in the same quarter of 2025. Non-GAAP diluted net income per ordinary share was RMB2.54 (US$0.37) in the second quarter of 2026, compared to RMB3.30 in the same quarter of 2025. Cash and cash equivalents, restricted cash, and time deposits were RMB6,795.5 million (US$1,001.5 million) as of June 30, 2026, compared to RMB7,892.4 million as of December 31, 2025. Key Operating Data Recent DevelopmentsShare Repurchase ProgramOn May 28, 2026, the Board authorized a share repurchase program (the “Share Repurchase Program”) under which the Company may repurchase up to US$150 million of its Class A ordinary shares in the form of American depositary shares ("ADSs") during a twelve-month period commencing on June 1, 2026. Pursuant to the Share Repurchase Program, the Company had repurchased approximately 2.57 million ADSs for an aggregate consideration of US$29.5 million on the open market as of August 24, 2026. As of the same date, the remaining unutilized amount under the Share Repurchase Program was approximately US$120.5 million. Resignation of Board MemberMr. Yong Zhang has resigned as a member of the Company's board of directors (the “Board”), effective immediately. Mr. Zhang's resignation was for personal reasons. The Company would like to take this opportunity to express its appreciation to Mr. Zhang for his service to the Board in the past years. Following Mr. Yong Zhang's resignation, the Board consists of six directors, including three independent directors. Key Definitions GMV (gross merchandise value) refers to gross merchandise value, a key operating metric that the Company’s management uses to measure and evaluate teahouses’ sales performance, which represents the sales value of product(s) in consumer orders (excluding unfulfilled, canceled or returned consumer orders, and including relevant value-added taxes) before discounts, if any, are applied, including shipping charges paid by consumers for orders placed on its mobile mini program, but excluding those charges paid by consumers for orders placed on other third-party online delivery platforms. Average monthly GMV per teahouse in Greater China is calculated by dividing (i) the sum of GMV generated by the monthly fully operational teahouses in Greater China in each calendar month during the specific period by (ii) the sum of the total number of the monthly fully operational teahouses in Greater China in each calendar month during the corresponding period. Same store GMV growth refers to the growth rate of GMV generated by same stores in Greater China and/or overseas during that specific period compared to GMV generated by these same stores during the corresponding period in the preceding year. Same stores are defined to be teahouses that (i) have been in operation for at least 13 months, and (ii) without material operational changes in both comparison periods. Non-GAAP net income. Calculated by net income excluding share-based compensation expenses. Non-GAAP basic and diluted net income per share. Calculated as non-GAAP net income attributable to the Company’s ordinary shareholders divided by weighted average number of basic and diluted shares. Conference Call The Company’s management team will hold a conference call at 8:00 A.M. U.S. Eastern Time on Friday, August 28, 2026 (or 8:00 P.M. Hong Kong Time on the same day) to discuss the financial results. Details for the conference call are as follows: All participants must use the link provided above to complete the online registration process in advance of the conference call. Upon registering, each participant will receive a set of participant dial-in numbers and a unique access PIN, which can be used to join the conference call. A live and archived webcast of the conference call will be available at the Company’s investor relations website at investor.chagee.com. About Chagee Chagee is a leading premium tea drinks brand, serving healthy and delicious freshly-made tea drinks. Founded in 2017, Chagee has transformed traditional tea culture into a modern lifestyle experience, leveraging cutting-edge technology and innovative branding. With its commitment to quality, innovation, and cultural connection, Chagee continues to reshape the global tea industry. Use of Non-GAAP Financial Measures The Company considers non-GAAP net income, as well as related margin or per share data, non-GAAP financial measures, as a supplemental measure to review and assess the operating performance. The presentation of this non-GAAP financial measure is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. The Company presents this non-GAAP financial measure because it is used by the management to evaluate the operating performance and formulate business plans. The Company also believes that the use of this non-GAAP measure facilitates investors’ assessment of the operating performance. This non-GAAP financial measure is not defined under U.S. GAAP and is not presented in accordance with U.S. GAAP. This non-GAAP financial measure has limitations as an analytical tool. One of the key limitations of using this non-GAAP financial measure is that it does not reflect all items of income and expense that affect the operations. Further, this non-GAAP measure may differ from the non-GAAP information used by other companies, including peer companies, and therefore its comparability may be limited. The Company compensates for these limitations by reconciling this non-GAAP financial measures to the nearest U.S. GAAP performance measure, all of which should be considered when evaluating the performance. The Company encourages you to review the financial information in its entirety and not rely on a single financial measure. The Company’s non-GAAP financial measure reflects adjustments for share-based compensation expense. The Company believes that the exclusion of share-based compensation expense is appropriate because it eliminates the impact of non-cash expenses that are based upon valuation methodologies and assumptions that vary over time, and the amount of the expense can vary significantly between companies due to factors that are unrelated to their core operating performance and that can be outside of their control. Although the Company excludes share-based compensation expense from the non-GAAP measure, equity compensation has been, and will continue to be, an important part of future compensation strategy and a significant component of future expenses and may increase in future periods. Exchange Rate Information This announcement contains translations of certain RMB amounts into U.S. dollars at specified rates solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to U.S. dollars are made at a rate of RMB6.7851 to US$1.00, the exchange rate set forth in the H.10 statistical release of the Board of Governors of the Federal Reserve System as of June 30, 2026. Safe Harbor Statement This announcement contains forward-looking statements within the meaning of Section 21E of the U.S. Securities Exchange Act of 1934, as amended. These forward-looking statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” “potential,” “continue,” “ongoing,” “targets,” “guidance” and similar statements. Chagee may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the “SEC”), in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Any statements that are not historical facts, including statements about Chagee’s beliefs and expectations, including its beliefs and expectations on overseas development, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: Chagee’s growth strategies; its future business development, results of operations and financial condition; its ability to retain and attract its customers; its ability to expand into overseas markets as expected; its ability to maintain and enhance the recognition and reputation of its brand; its ability to maintain and improve quality control policies and measures; its ability to establish and maintain relationships with its suppliers and business partners; trends and competition in China’s freshly-made tea drinks industry or China’s food and beverage sector in general; changes in its revenues and certain cost or expense items; the expected growth of China’s freshly-made tea drinks industry or China’s food and beverage sector in general; governmental policies and regulations relating to Chagee’s industry; and general economic and business conditions globally and in China and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks, uncertainties or factors is included in Chagee’s filings with the SEC. All information provided in this press release and in the attachments is as of the date of this press release, and Chagee undertakes no obligation to update any forward-looking statement, except as required under applicable law. Contact Investor RelationsRobin Yang, PartnerICR, LLCEmail: [email protected] Phone: +1 (212) 537-5825 Media RelationsBrad Burgess, SVPICR, LLCEmail: [email protected] ____________________________1 Please refer to the section “Key Definitions” for detailed definitions on certain terms used. * In preparing this unaudited condensed consolidated financial statements on Form 6-K, the Company identified a calculation error in the weighted-average number of ordinary shares used in computing diluted net income per share and corresponding diluted net income per ordinary share (“Diluted EPS”) as well as non-GAAP Diluted EPS for the six months ended June 30, 2025, as presented in the previously furnished Form 6-K for Second Quarter 2025. The error was limited solely to the computation of the cumulative six-month weighted-average number of ordinary shares used in computing Diluted EPS, and did not impact Diluted EPS for any individual three-month periods or any other reported amounts. # The components of the Company’s share-based compensation expenses are as follows (all amounts in thousands): There were no tax effects of share-based compensation expenses adjustments.

This article first appeared on GuruFocus. Release Date: August 28, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Chagee Holdings Ltd (NASDAQ:CHA) reported a substantial improvement in GAAP net income margin, rising to 13.6% in Q2 2026 from 2.3% in the same period last year, driven by organizational efficiency and disciplined cost management. Overseas expansion is a significant growth engine, with GMV reaching RMB504 million, up 18.2% sequentially and 114.3% year-over-year, including a successful entry into the South Korean market. The company launched a record 17 new products in a single quarter, expanding beyond its core loose-leaf fresh milk tea into categories like special deals, lemon tea latte, and gelato, which have driven strong initial sales and new customer acquisition. Same-store sales are showing signs of recovery, with July's low single-digit decline improving meaningfully from the first half and August expected to turn positive year-over-year. Chagee Holdings Ltd (NASDAQ:CHA) is actively returning capital to shareholders, having executed approximately $30 million of its $150 million share repurchase program and is exploring a more regular and sustainable shareholder return mechanism, including potential regular dividends. Operational efficiency improved significantly, with non-GAAP G&A expense ratio declining to 9.1% from 13.2% year-over-year and non-GAAP sales and marketing expense ratio narrowing to 8.8% from 10.6%, reflecting a more disciplined approach to resource allocation. Total revenue for Chagee Holdings Ltd (NASDAQ:CHA) saw a sequential decline of 3.7% quarter-over-quarter, and total GMV was down 3.3% sequentially, reflecting a softer macro backdrop and more intense competition. Greater China GMV decreased 4.5% sequentially, and average monthly GMV per tea house in the region declined to RMB338,259 from RMB356,080 in the first quarter. The company acknowledged that the fresh milk tea category is becoming crowded, with the competitive landscape shifting from shared growth in an expanding market to competition over a fixed space, intensifying rivalry. Management characterized 2026 as a year of adjustment and stabilization, explicitly stating that the core objective is not to pursue rapid expansion in scale, which may signal a period of slower growth. The external environment saw volatility in the second quarter, and management noted that the old marketing playbook has lost effectiveness, requiring new and potentially costly ways to connect with consumers. While profitability held, non-GAAP operating income margin slightly decreased to 16.1% in Q2 from 17.1% in Q1, indicating some pressure on operating leverage despite cost controls. Warning! GuruFocus has detected 6 Warning Signs with JFIN. Is CHA fairly valued? Test your thesis with our free DCF calculator. Q: How does management view the second-half of the year amid the current competitive market environment?A: CEO Junjie Zhang stated that 2026 is viewed as a year of adjustment and stabilization. The core objective is not rapid expansion but building a stronger foundation for sustainable growth. In the second half, the company will execute on the results and learnings from the first half, focusing on fundamentals like product quality and member experience. Management remains confident in steady development despite external volatility. Q: Could you share how same-store sales have trended so far in the third quarter?A: COO Aiden Yin reported positive signs of recovery. Same-store sales in July showed a low single-digit decline, a meaningful improvement from the first half, and August is expected to turn positive year-over-year. This is driven by a strong new product pipeline (including guava peach iced tea and relaunched bestsellers), the summer peak season benefiting recent launches like gelato, and continued refinement of in-store service and customer experience. Q: Does the company have any further payout plans?A: CFO Aaron Huang confirmed that enhancing shareholder returns is a firm direction. The board and management are actively reviewing options, including regular dividends, while considering medium to long-term strategy and funding needs. Management will bring a proposal to the board at the appropriate time and provide an update to the market. Q: What were the key financial highlights for the second quarter of 2026?A: CFO Aaron Huang reported total revenue of RMB3,415 million, up 2.5% year-over-year. GAAP net income was RMB465 million (13.6% margin), a substantial improvement from 2.3% last year. Non-GAAP net income was RMB489 million with a 14.3% margin. The company extended its track record to 14 consecutive quarters of positive net income, demonstrating durable cost structure and organizational efficiency gains. Q: How did overseas markets perform, and what is the expansion strategy?A: COO Aiden Yin highlighted that overseas GMV reached RMB504 million, up 18.2% sequentially and 114.3% year-over-year, serving as a clear growth engine. The company entered South Korea this quarter, with three stores selling over 16,000 cups in their first three days. The Boya Tea Latte series increased average cups sold per teahouse by 52% across the Asia Pacific region during its first 15 days, underscoring cross-market appeal. Q: What progress has been made on product innovation and category expansion?A: COO Aiden Yin noted the launch of 17 new products in Q2, the highest in a single quarter. Offerings expanded beyond loose-leaf fresh milk tea to include special deals, lemon tea latte, matcha latte, and gelato. The special deals averaged 124 cups per tea house per day in its first three days, and the lemon tea latte increased first-time member acquisition by 45%. Gelato has been introduced in over 190 tea houses, boosting average offline channel GMV by more than 20%. Q: How is the company managing operating expenses and efficiency?A: CFO Aaron Huang explained that non-GAAP G&A expense ratio declined to 9.1% from 13.2% a year ago, and non-GAAP sales and marketing expense ratio narrowed to 8.8% from 10.6%. These improvements reflect a more disciplined and efficient approach to resource allocation, not simply cutting spending. The company is executing faster with greater precision while focusing resources on initiatives that create the most value for consumers. Q: What is the status of the share repurchase program?A: CEO Junjie Zhang announced that as of August 24, the company has executed approximately $30 million in repurchases under the up to $150 million program announced last quarter. This demonstrates the company's firm confidence in its long-term value and delivers a tangible return on shareholders' trust. Q: How is the company addressing the structural changes in the tea beverage industry?A: CEO Junjie Zhang acknowledged that the industry is undergoing structural change with increased competition and shifting consumer values. The company is building capabilities across four dimensions: strengthening core capabilities, broadening product mix, enhancing consumer reach, and evolving the value proposition. The focus is on emotional resonance and experience-driven retention to turn new consumers into loyal, long-term customers. Q: What are the key priorities for the remainder of 2026?A: COO Aiden Yin outlined clear priorities: maintaining a consistent product launch cadence and expanding into new categories; optimizing the membership program and consumer experience; prioritizing high-quality growth in Greater China while expanding overseas in a disciplined manner; differentiating tea houses through thoughtful design; and staying aligned with market trends to elevate the tea experience through brand enhancements and improved training systems. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management is transitioning the company into a mature, stable phase by prioritizing 'genuine consumer recognition' over external market trends. Performance recovery in Q1 was driven by a qualitative leap in organizational efficiency, which enabled faster decision-making and more precise resource allocation. The company has deliberately slowed its teahouse expansion pace to focus on improving operating quality and ensuring consistent brand standards across the network. Strategic focus has shifted to five core dimensions: products, service, environment, experience, and value proposition to navigate market cycles. A new business model has been fully implemented to align the interests of the company and its franchisees, creating a community of shared interest. Management views the current share price as significantly undervalued, leading to the authorization of a USD 150 million share repurchase program. The company expects overseas markets to become an increasingly important growth engine, following a 139% year-over-year GMV increase in those regions. Future product strategy involves maintaining a steady launch cadence while expanding into new categories like tea lattes and special deals. Management plans to continue upgrading the 'third place' experience to make teahouses destinations where consumers genuinely want to spend time. The share repurchase program will be executed over a 12-month period, with the pace adjusted based on market conditions and valuation. Operational focus will remain on perfecting every consumer touchpoint to drive long-term value creation and sustainable profit. A significant organizational restructuring led to a decline in the non-GAAP G&A expense ratio by 8.1 percentage points sequentially to 11.6%. The company transitioned to a GMV-based revenue sharing model, which lowers material costs for franchisees while increasing the proportion of franchising service revenue. Total registered members reached 248 million, with active members contributing over 76% of total orders through repeat purchases. The company-owned teahouse network expanded to 790 locations, up from 191 a year ago, as part of a deliberate network optimization strategy. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Improvement was driven by the Qian Wen campaign, which contributed approximately 3 million orders per day during its peak period. The launch of 12 new products and the expansion of morning and evening consumption scenarios doubled the share of cups sold during morning hours. Narrowing declines in overseas same-store GMV were attributed to locally tailored products like the Caramel Oolong Tea Latte in Singapore. Management clarified that the change in revenue mix does not negatively affect profitability; gross margin remained stable at 55.6%. The model reduces raw material and equipment costs for franchisees, aiming to improve teahouse-level resilience and long-term sustainability. Company revenue is now more closely tied to teahouse performance, creating a win-win scenario where both parties benefit from sales growth. The decision is backed by a strong liquidity position of approximately RMB 7.15 billion (USD 1.04 billion) in cash and equivalents. Management believes the current market valuation fails to reflect the recovery in business fundamentals and long-term growth potential. The buyback is intended to demonstrate confidence and deliver tangible improvements in shareholder returns.

This article first appeared on GuruFocus. Release Date: May 29, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Chagee Holdings Ltd (NASDAQ:CHA) reported a 4.5% year-over-year increase in total revenue, reaching RMB3,546 million. The company's gross margin improved to 55.6%, up from 53.1% a year ago. Overseas markets are becoming a significant growth engine, with overseas GMV growing 139% year-over-year. The company launched 12 new products in the first quarter, contributing to sequential growth in both cup volume and GMV. Chagee Holdings Ltd (NASDAQ:CHA) announced a $150 million share repurchase program, demonstrating confidence in its long-term growth prospects. Overall same-store GMV growth was down 16%, although this was an improvement from the previous quarter. The company's net revenue from franchisee tea houses decreased compared to a year ago. General and administrative expenses increased by 30.9% year-over-year, reflecting continued investment in global corporate infrastructure. Income tax expenses increased to 21.2% of income before income tax, up from 19% a year ago. The company's cash and cash equivalents decreased from $7,892.4 million at the end of 2025 to $7,146.3 million by the end of the first quarter of 2026. Is CHA fairly valued? Test your thesis with our free DCF calculator. Q: What factors contributed to the sequential improvement in unit GMV in China and overall? A: The improvement was driven by several factors. First, the Tianwen campaign provided an incremental lift, contributing about 3 million orders per day during its peak. Second, the launch of 12 new products in Q1 helped drive growth in both cup volume and GMV. Additionally, expanding morning and evening consumption scenarios with products like caramel pour tea latte contributed significantly. Lastly, overseas markets saw narrowed declines in same-store GMV growth due to locally tailored products, such as the caramel oolong tea latte in Singapore, which captured an 18% cup share during the campaign period. CFO Q: How will the new GMV-based revenue-sharing model affect profitability? A: The new model, which involves a higher fee rate based on franchise tea house GMV, has changed our revenue mix but does not affect profitability. The proportion of revenue from product sales has declined, while revenue from franchising services has increased. Our gross margin remained stable at 55.6%, with a slight sequential increase. The model aligns the company and franchisees as a community of shared interests, improving tea house profitability and resilience. CFO Q: What are the thoughts behind the $150 million share repurchase program, and how does it compare to cash dividends? A: The share repurchase program reflects our belief that the current share price does not fully reflect our business recovery and long-term growth potential. It demonstrates the Board and management's confidence in the company's future growth prospects. Our balance sheet remains healthy, with strong liquidity, allowing us to optimize capital allocation and improve shareholder returns. CEO Q: Can you elaborate on the strategic direction and operational focus for 2026? A: Our strategic direction is clear, focusing on perfecting every consumer touchpoint. We have improved organizational efficiency, defined product and marketing plans, and are committed to long-term value creation. Our efforts are centered on product, service, environment, experience, and value proposition. We aim to maintain high-quality growth and believe our current share price is undervalued. CEO Q: How is the overseas market performing, and what are the expansion plans? A: Overseas markets are becoming an increasingly important growth engine, with GMV growing 139% year-over-year and 14.6% quarter-over-quarter. Our tea house network includes locations in Singapore, Malaysia, Thailand, Indonesia, the Philippines, Vietnam, and the United States. We maintain a steady growth pace and plan to continue expanding while ensuring operating performance aligns with expectations. COO For the complete transcript of the earnings call, please refer to the full earnings call transcript.

SHANGHAI, May 29, 2026 (GLOBE NEWSWIRE) -- Chagee Holdings Limited (NASDAQ: CHA) (“Chagee” or the “Company”), a leading premium tea drinks brand serving healthy and delicious freshly-made tea drinks, today announced its unaudited financial results for the first quarter ended March 31, 2026. First Quarter 2026 Operational Highlights1 As of March 31, 2026, there were 7,531 teahouses within the Company’s teahouse network in Greater China and overseas, representing a 12.7% increase in the number of teahouses as of March 31, 2025. Total GMV generated in the first quarter of 2026 was RMB7,917.8 million. Geographically, total GMV generated in overseas markets was RMB426.4 million in the first quarter of 2026, representing a 139.0% year-over-year increase; total GMV generated in Greater China market was RMB7,491.4 million, compared to RMB8,048.4 million in the same quarter of 2025. Average monthly GMV per teahouse in Greater China was RMB356,080 in the first quarter of 2026, representing a 5.5% increase from RMB337,358 in the fourth quarter of 2025. Chagee had 50.0 million active members in the first quarter of 2026, representing an 11.7% increase from the fourth quarter of 2025. First Quarter 2026 Financial Highlights Net revenues were RMB3,546.0 million (US$514.1 million), compared to RMB3,392.7 million in the same quarter of 2025. Operating income in the first quarter of 2026 was RMB547.2 million (US$79.3 million), compared to RMB820.8 million in the same quarter of 2025. GAAP net income was RMB447.7 million (US$64.9 million), compared to RMB677.3 million in the same quarter of 2025. Non-GAAP net income, which adjusts for share-based compensation expenses in the amount of RMB59.0 million, was RMB506.7 million (US$73.5 million), compared to RMB677.3 million in the same quarter of 2025. First Quarter 2026 Financial Results Total net revenues were RMB3,546.0 million (US$514.1 million), compared to RMB3,392.7 million in the same quarter of 2025. Net revenues from franchised teahouses in the first quarter of 2026 were RMB2,743.9 million (US$397.8 million), compared to RMB3,149.9 million in the same quarter of 2025. This was mainly attributable to a decrease in total GMV in Greater China resulting from the economic headwinds as well as intense industry competition. Net revenues from franchised teahouses represented 77.4% of the Company’s total net revenues for the first quarter of 2026. Net revenues from company-owned teahouses in the first quarter of 2026 were RMB802.1 million (US$116.3 million), representing an increase of 230.4% from RMB242.8 million in the same quarter of 2025. The increase was mainly attributable to the conversion in the Company’s domestic teahouse composition. Net revenues from company-owned teahouses represented 22.6% of the Company’s total net revenues for the first quarter of 2026. Total operating expenses were RMB2,998.8 million (US$434.7 million), compared to RMB2,571.9 million in the same quarter of 2025. Cost of materials, storage and logistics was RMB1,574.5 million (US$228.3 million), representing a decrease of 1.0% from RMB1,590.3 million in the same quarter of 2025. The decrease was mainly attributable to enhanced cost management initiatives implemented throughout the supply chain and improved pricing power. Company-owned teahouse operating costs were RMB497.2 million (US$72.1 million), representing an increase of 216.6% from RMB157.0 million in the same quarter of 2025. The increase mainly resulted from the addition of 599 company-owned teahouses in both Greater China and overseas markets, which led to higher payroll, store rental, utilities, and other store operating expenses. Other operating costs were RMB159.0 million (US$23.0 million), representing a decrease of 7.8% from RMB172.5 million in the same quarter of 2025. This was mainly due to a decrease of RMB20.4 million in payroll expenses, driven by organizational restructuring and headcount optimization. Other operating costs as a percentage of total net revenues were 4.5%, compared to 5.1% in the same quarter of 2025. Sales and marketing expenses were RMB306.2 million (US$44.4 million), representing an increase of 2.3% from RMB299.3 million in the same quarter of 2025. This was mainly driven by an increase in advertising expenses associated with branding activities, new product launches, and related marketing campaigns, partially offset by lower payroll expenses resulting from streamlining the branding and marketing team. Sales and marketing expenses as a percentage of total net revenues were 8.6%, compared to 8.8% in the same quarter of 2025. General and administrative expenses were RMB462.0 million (US$67.0 million), representing an increase of 30.9% from RMB352.8 million in the same quarter of 2025. The increase was primarily driven by increases of (i) RMB52.1 million in share-based compensation expenses for administration, research and development staff; and (ii) RMB38.6 million in payroll expenses (excluding share-based compensation expenses) and RMB22.7 million in rental, utilities, office and travelling expenses for administration, research and development staff, which were primarily associated with the Company’s global business expansion. General and administrative expenses as a percentage of total net revenues were 13.0%, compared to 10.4% in the same quarter of 2025. Net income was RMB447.7 million (US$64.9 million) in the first quarter of 2026, representing a net income margin of 12.6%, compared to RMB677.3 million, or a net income margin of 20.0%, in the same quarter of 2025. Non-GAAP net income was RMB506.7 million (US$73.5 million) in the first quarter of 2026, representing a non-GAAP net income margin of 14.3%, compared to RMB677.3 million, or a non-GAAP net income margin of 20.0%, in the same quarter of 2025. Basic net income per ordinary share was RMB2.36 (US$0.34) in the first quarter of 2026, compared to RMB3.92 in the same quarter of 2025. Diluted net income per ordinary share was RMB2.34 (US$0.34) in the first quarter of 2026, compared to RMB3.92 in the same quarter of 2025. Non-GAAP basic net income per ordinary share was RMB2.67 (US$0.39) in the first quarter of 2026, compared to RMB3.92 in the same quarter of 2025. Non-GAAP diluted net income per ordinary share was RMB2.65 (US$0.38) in the first quarter of 2026, compared to RMB3.92 in the same quarter of 2025. Cash and cash equivalents, restricted cash, and time deposits were RMB7,146.3 million (US$1,036.0 million) as of March 31, 2026, compared to RMB7,892.4 million as of December 31, 2025. Key Operating Data Share Repurchase ProgramOn May 28, 2026, the board of directors of the Company has authorized a share repurchase program under which the Company may repurchase up to US$150 million of its Class A ordinary shares in the form of American depositary shares (“ADSs”) during a twelve-month period commencing on June 1, 2026. The Company’s proposed repurchases may be made from time to time through open market transactions at prevailing market prices, in privately negotiated transactions, in block trades and/or through other legally permissible means, depending on the market conditions and in accordance with applicable rules and regulations. The timing and dollar amount of repurchase transactions will be subject to the Securities and Exchange Commission (the “SEC”) Rule 10b-18 and/or Rule 10b5-1 requirements. The Company plans to fund repurchases from its existing cash balance. Key Definitions GMV (gross merchandise value) refers to gross merchandise value, a key operating metric that the Company’s management uses to measure and evaluate teahouses’ sales performance, which represents the sales value of product(s) in consumer orders (excluding unfulfilled, canceled or returned consumer orders, and including relevant value-added taxes) before discounts, if any, are applied, including shipping charges paid by consumers for orders placed on its mobile mini program, but excluding those charges paid by consumers for orders placed on other third-party online delivery platforms. Average monthly GMV per teahouse in Greater China is calculated by dividing (i) the sum of GMV generated by the monthly fully operational teahouses in Greater China in each calendar month during the specific period by (ii) the sum of the total number of the monthly fully operational teahouses in Greater China in each calendar month during the corresponding period. Same store GMV growth refers to the growth rate of GMV generated by same stores in Greater China and/or overseas during that specific period compared to GMV generated by these same stores during the corresponding period in the preceding year. Same stores are defined to be teahouses that (i) have been in operation for at least 13 months, and (ii) without material operational changes in both comparison periods. Non-GAAP net income. Calculated by net income excluding share-based compensation expenses. Non-GAAP basic and diluted net income per share. Calculated as non-GAAP net income attributable to the Company’s ordinary shareholders divided by weighted average number of basic and diluted shares. Conference Call The Company’s management team will hold a conference call at 9:00 P.M. U.S. Eastern Time on Thursday, May 28, 2026 (or 9:00 A.M. Hong Kong Time on Friday, May 29, 2026) to discuss the financial results. Details for the conference call are as follows: All participants must use the link provided above to complete the online registration process in advance of the conference call. Upon registering, each participant will receive a set of participant dial-in numbers and a unique access PIN, which can be used to join the conference call. A live and archived webcast of the conference call will be available at the Company’s investor relations website at investor.chagee.com. About Chagee Chagee is a leading premium tea drinks brand, serving healthy and delicious freshly-made tea drinks. Founded in 2017, Chagee has transformed traditional tea culture into a modern lifestyle experience, leveraging cutting-edge technology and innovative branding. With its commitment to quality, innovation, and cultural connection, Chagee continues to reshape the global tea industry. Use of Non-GAAP Financial Measures The Company considers non-GAAP net income, a non-GAAP financial measure, as a supplemental measure to review and assess the operating performance. The presentation of this non-GAAP financial measure is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. The Company presents this non-GAAP financial measure because it is used by the management to evaluate the operating performance and formulate business plans. The Company also believes that the use of this non-GAAP measure facilitates investors’ assessment of the operating performance. This non-GAAP financial measure is not defined under U.S. GAAP and is not presented in accordance with U.S. GAAP. This non-GAAP financial measure has limitations as an analytical tool. One of the key limitations of using this non-GAAP financial measure is that it does not reflect all items of income and expense that affect the operations. Further, this non-GAAP measure may differ from the non-GAAP information used by other companies, including peer companies, and therefore its comparability may be limited. The Company compensates for these limitations by reconciling this non-GAAP financial measures to the nearest U.S. GAAP performance measure, all of which should be considered when evaluating the performance. The Company encourages you to review the financial information in its entirety and not rely on a single financial measure. The Company’s non-GAAP financial measure reflects adjustments for share-based compensation expense. The Company believes that the exclusion of share-based compensation expense is appropriate because it eliminates the impact of non-cash expenses that are based upon valuation methodologies and assumptions that vary over time, and the amount of the expense can vary significantly between companies due to factors that are unrelated to their core operating performance and that can be outside of their control. Although the Company excludes share-based compensation expense from the non-GAAP measure, equity compensation has been, and will continue to be, an important part of future compensation strategy and a significant component of future expenses and may increase in future periods. Exchange Rate Information This announcement contains translations of certain RMB amounts into U.S. dollars at specified rates solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to U.S. dollars are made at a rate of RMB6.8980 to US$1.00, the exchange rate set forth in the H.10 statistical release of the Board of Governors of the Federal Reserve System as of March 31, 2026. Safe Harbor Statement This announcement contains forward-looking statements within the meaning of Section 21E of the U.S. Securities Exchange Act of 1934, as amended. These forward-looking statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” “potential,” “continue,” “ongoing,” “targets,” “guidance” and similar statements. Chagee may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the “SEC”), in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Any statements that are not historical facts, including statements about Chagee’s beliefs and expectations, including its beliefs and expectations on overseas development, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: Chagee’s growth strategies; its future business development, results of operations and financial condition; its ability to retain and attract its customers; its ability to expand into overseas markets as expected; its ability to maintain and enhance the recognition and reputation of its brand; its ability to maintain and improve quality control policies and measures; its ability to establish and maintain relationships with its suppliers and business partners; trends and competition in China’s freshly-made tea drinks industry or China’s food and beverage sector in general; changes in its revenues and certain cost or expense items; the expected growth of China’s freshly-made tea drinks industry or China’s food and beverage sector in general; governmental policies and regulations relating to Chagee’s industry; and general economic and business conditions globally and in China and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks, uncertainties or factors is included in Chagee’s filings with the SEC. All information provided in this press release and in the attachments is as of the date of this press release, and Chagee undertakes no obligation to update any forward-looking statement, except as required under applicable law. Contact Investor RelationsRobin Yang, PartnerICR, LLCEmail: [email protected] Phone: +1 (212) 537-5825 Media RelationsBrad Burgess, SVPICR, LLCEmail: [email protected] _______________________________1 Please refer to the section “Key Definitions” for detailed definitions on certain terms used. * The components of the Company’s share-based compensation expenses are as follows (all amounts in thousands):

Management attributed the 25.5% year-over-year decline in Q4 same-store sales to internal organizational restructuring and a deliberate pause in new product launches to refine operations. The company acknowledged underestimating the impact of third-party delivery platform price wars on offline sales, choosing to maintain premium brand positioning rather than chasing low-price traffic. A transition in the business model was initiated to shift from traditional supply relations to a GMV-based revenue sharing model with franchisees to align interests during market downturns. The rapid expansion phase of 2023-2024 has evolved into a 'high-quality development' phase, focusing on extracting value from the existing 7,453 tea house network. Operational underperformance was partially blamed on the complexity of managing over 3,000 employees, which delayed the rollout of key strategic initiatives in 2025. Gross margin improved to 53.2% primarily due to optimized costs in packaging materials, equipment, and supply chain efficiencies. The 2026 strategy prioritizes same-store sales recovery and market share over net profit, with a goal to keep revenue and profit broadly flat year-on-year. Domestic expansion will moderate significantly to approximately 300 net new tea houses, focusing on high-quality locations and healthy unit economics. Overseas expansion is viewed as a 'long-lasting marathon' with a target of 200 net new tea houses in 2026, including a planned entry into the South Korean market in Q2. Product innovation will focus on 'all-day' consumption scenarios, including morning energizing drinks and evening low-caffeine options to capture diverse consumer lifestyles. Management expects same-store sales and operations to stabilize in the first half of 2026 and show healthier trends in the second half. The company recorded an operating loss of RMB 35.5 million in Q4, largely due to RMB 320 million in one-time costs related to organizational optimization and business model transitions. General and administrative expenses rose 89% year-over-year, reflecting heavy investment in global corporate infrastructure and restructuring costs. A strategic shift saw the conversion of several franchisee tea houses into company-owned locations, increasing the company-owned count to 615 to better control brand experience. Management flagged the 'K-shaped' divergence in consumer spending as a persistent market risk requiring differentiated product lines for value and premium seekers. Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management admitted to 'taking detours' in product launch rhythms but cited the recent Tianwen campaign as evidence of restored team agility. The 'Signature Four Tea' launch demonstrated high dormant member reactivation (51%), proving product innovation remains the primary driver for navigating cycles. The new model shifts from selling materials to franchisees to a revenue-sharing approach based on store GMV. While brand fees increased slightly, they are offset by lower raw material costs and better marketing support, creating a 'shared risk' environment. The U.S. market is a high-priority, high-CapEx focus where the company aims to change drinking habits rather than just open stores. Management requested investor patience for overseas volatility, emphasizing the goal of evolving from a tea maker to a global lifestyle brand. Phase 1 of restructuring is complete, involving the consolidation of mid- and back-office functions to eliminate duplicate work. Marketing spend will remain a priority investment area, while G&A will be optimized through stricter budgeting and digital tools. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here.