霸王茶姬二季度利润率改善但收入和核心中国GMV放缓

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Introduction & Market Context
Chagee Holdings Limited (NASDAQ:CHA) presented its second-quarter 2026 results on August 28, revealing a company navigating the tension between improving profitability and sluggish revenue growth in an increasingly competitive Chinese tea beverage market. The presentation emphasized operational efficiency gains and international expansion, even as the company’s domestic business showed signs of maturation.
The earnings call came as Chagee shares traded at $10.28 in premarket activity, down 0.68% from the previous close of $10.35. At current levels, the stock remains well below its 52-week high of $20.57, reflecting investor caution about growth prospects despite improving margins.
Quarterly Performance Highlights
As shown in the following overview of key financial and operational metrics, Chagee demonstrated disciplined execution across multiple dimensions in the second quarter.
Total net revenues reached RMB 3,414.6 million in the quarter, representing modest growth of 2.5% year-over-year but a 3.7% sequential decline from the first quarter. The company’s gross merchandise value (GMV) totaled RMB 7,660.3 million, with overseas markets showing particular strength at 114.3% growth year-over-year.
More impressive was the bottom-line performance. Non-GAAP net income reached RMB 488.7 million, while operating income came in at RMB 524.7 million, translating to a 15.4% operating margin—up sharply from 3.2% in the same quarter last year. The improvement reflected both a restructuring completed earlier in the year and tighter control of operating expenses.
The following chart illustrates the quarterly revenue and profitability trends over the past year, showing the margin expansion story clearly.
The revenue pattern shows some volatility, with a seasonal dip in the fourth quarter of 2025 and recovery in early 2026. However, the non-GAAP net income trajectory demonstrates the company’s success in improving operational leverage, even as top-line growth has moderated.
Expansion Strategy and Geographic Footprint
Chagee’s global teahouse network reached 7,639 locations by the end of June 2026, representing a net addition of 108 stores during the quarter. The expansion showed a deliberate focus on quality over quantity, with management emphasizing "quality-led expansion" as a core principle.
The following breakdown illustrates the company’s geographic distribution and recent expansion activity across regions.
Greater China remains the core market with 7,240 teahouses, adding 83 net new locations in the quarter. However, the overseas segment is emerging as a key growth driver, with 399 locations across eight markets. Notable expansion occurred in Indonesia (46 stores, up from 8 a year earlier), Singapore (41 stores), Thailand (36 stores), and the United States (10 stores).
The company’s entry into South Korea marked a strategic milestone, with six new teahouses opening in the quarter. As shown in the following images, these new market launches featured prominent grand opening events and distinctive store designs.
The photographs from South Korea, the United States, and Macao demonstrate Chagee’s commitment to creating differentiated retail experiences in each market, with store designs that blend modern aesthetics with cultural elements.
Product Innovation and Brand Positioning
Product innovation remained central to Chagee’s strategy in the second quarter, with the company launching a record 17 new products. Management highlighted these launches as critical tools for customer acquisition and traffic generation in an intensely competitive market.
The following collage showcases the breadth of product innovation across multiple categories during the quarter.
Key launches included the Lemon Tea Latte series, World Tea Series featuring globally-inspired flavors, the Geelato line of tea-flavored gelato products, a Mango Series with jasmine tea and yuzu variants, and House-Crafted Tea offerings like Cloud Nine Lychee. The diversity of offerings reflects Chagee’s strategy to expand beyond traditional tea beverages into adjacent categories.
CEO Junjie Zhang emphasized the importance of fundamentals in the current environment. "The more complex the market, the more important it is to return to the fundamentals," he said during the earnings call. "The more intense the competition, the more important it is to perfect every consumer touch point."
The company’s strategic framework, as illustrated below, centers on three pillars: cultural connections through immersive experiences, unwavering product innovation, and healthy network growth.
Operational Efficiency and Cost Management
One of the most significant developments in the quarter was Chagee’s success in controlling operating expenses as a percentage of revenue. The company achieved meaningful leverage in both sales and marketing expenses and general and administrative costs.
The following chart tracks the company’s key cost categories as a percentage of total net revenues over the past four quarters.
Cost of materials, storage and logistics remained relatively stable at 46% of revenue in the second quarter. Sales and marketing expenses held at 9%, down from a peak of 12% in the fourth quarter of 2025. Most notably, general and administrative expenses fell to just 9% of revenue, down from 20% in Q4 2025 and 13% in Q3 2025.
CFO Aaron Huang emphasized that these improvements are structural rather than temporary. "The company’s cost structure improvements are durable, not temporary," he stated, adding that the efficiency gains position Chagee for sustained profitability even in a challenging growth environment.
Business Model Evolution
An important but subtle shift is occurring in Chagee’s business model, with company-owned stores growing significantly faster than the franchised network. This evolution has implications for both revenue quality and capital intensity.
The following breakdown shows the changing mix between franchised and company-owned operations.
Company-owned stores generated RMB 941 million in revenue during Q2 2026, up from just RMB 176 million in Q2 2024—a more than fivefold increase. Meanwhile, franchised revenue declined to RMB 2,474 million from RMB 2,848 million two years earlier. The number of company-owned stores reached 883, up from 118 two years ago, while franchised locations grew more modestly to 6,756 from 4,878.
This shift suggests Chagee is taking more direct control of the customer experience and retail operations, particularly in key markets. While this approach requires more capital, it provides greater control over quality, service standards, and brand consistency—factors management views as critical in a crowded market.
Capital Allocation and Shareholder Returns
Despite the challenging revenue environment, Chagee maintained a strong balance sheet and continued to return capital to shareholders. The company’s cash position and capital allocation priorities are illustrated below.
Cash and cash equivalents, restricted cash, and time deposits totaled RMB 6,795 million as of June 30, 2026. The company generated RMB 358 million in net cash from operating activities during the quarter, demonstrating the quality of its earnings.
Chagee has been active in share repurchases, buying back USD 29.5 million worth of stock as of August 24 under its $150 million authorization. The company maintains a conservative debt-to-equity ratio of just 0.17, providing ample financial flexibility.
Notably, management indicated it is reviewing options for more regular shareholder payouts, including potential dividend payments. "Continuously enhancing shareholder returns remain a firm direction for us," CFO Huang said, though he did not provide a specific timeline for dividend initiation.
Forward-Looking Outlook
Chagee did not provide specific revenue or earnings guidance for the remainder of 2026, instead characterizing the year as one of "adjustment and stabilization" focused on execution rather than rapid expansion.
Management offered some color on recent trends, noting that same-store sales in July showed a low single-digit decline—a meaningful improvement from the first half of the year. The company expected August to turn positive year-over-year, driven by new product launches, better service execution, and seasonal demand patterns.
The cautious tone reflects the reality of operating in a maturing domestic market with intense competition. Greater China GMV fell 4.5% sequentially in the second quarter, highlighting the pressure on the core business. However, overseas markets continue to show strong momentum, with GMV rising 18.2% sequentially and more than doubling year-over-year.
The company’s strategy appears focused on building a more sustainable foundation for growth rather than chasing rapid store expansion. The emphasis on product innovation, operational excellence, and international diversification positions Chagee to navigate near-term headwinds while investing in longer-term opportunities.
For investors, the key question is whether margin expansion and overseas growth can offset the slowdown in China’s tea beverage market. At current valuation levels—with the stock trading at roughly half its 52-week high—the market appears to be pricing in continued growth challenges, even as the company demonstrates improving profitability and capital discipline.
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