Atour Lifestyle Holdings Limited (ATAT) Q2 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call highlights strong financial performance with increased revenues, EBITDA, and a robust cash position. Despite some margin pressures, the company maintains positive guidance and plans significant hotel expansions. The Q&A section reveals management's confidence in overcoming challenges, with innovative product launches and strategic growth plans. A substantial share repurchase program and dividend declaration further boost investor sentiment. Given these factors and the company's market cap, a stock price increase of 2% to 8% is likely over the next two weeks.
Key Financial Performance
RevPAR RMB 343 in Q2 2025, representing 95.7% of its level in the same period of 2024. OCC reached 97.4% and ADR stood at 98.2% of their levels in the same period in 2024.
RevPAR for mature hotels 94.4% of the level in the same period of 2024. OCC and ADR stood at 96.5% and 97.8% of 2024's levels for the same period, respectively.
Number of hotels in operation 1,824 hotels by the end of Q2 2025, representing a 29.2% year-over-year increase.
Number of hotels under development 816 hotels by the end of Q2 2025.
Retail GMV RMB 1,144 million in Q2 2025, rising 84.6% year-over-year. Online channels accounted for over 90% of total GMV.
Net revenues RMB 2,469 million in Q2 2025, growing by 37.4% year-over-year and 29.5% quarter-over-quarter.
Revenues from manachised hotels RMB 1,299 million in Q2 2025, up 26.5% year-over-year and 25.9% quarter-over-quarter. The increase was fueled by ongoing hotel network expansion.
Revenues from leased hotels RMB 150 million in Q2 2025, a decrease of 17% year-over-year and an increase of 16.4% quarter-over-quarter. The year-over-year decline was due to a decrease in the number of leased hotels as a result of product mix optimization.
Revenues from retail business RMB 965 million in Q2 2025, up 79.8% year-over-year and 39.1% quarter-over-quarter. The increase was driven by growing recognition of retail brands and effective product innovation.
Hotel operating costs RMB 893 million in Q2 2025, increasing by 15.1% year-over-year and 21.3% quarter-over-quarter. The increase was due to variable costs associated with hotel network expansion.
Gross margin of hotel businesses 38.3% in Q2 2025, up from 35.7% in the same period of 2024, primarily due to product mix optimization.
Retail cost RMB 451 million in Q2 2025, rising by 70.0% year-over-year and 33.5% quarter-over-quarter. The increase was associated with the rapid growth of the retail business.
Gross margin of retail business 53.3% in Q2 2025, up from 50.6% in the same period of 2024, primarily due to the increasing contribution from higher-margin products.
Selling and marketing expenses RMB 393 million in Q2 2025, compared with RMB 225 million in the same period of 2024. The increase was due to investment in brand recognition and online channel development.
General and administrative expenses RMB 90 million in Q2 2025, compared with RMB 91 million in the same period of 2024. The decrease was due to improved management efficiency and economies of scale.
Technology and development expenses RMB 43 million in Q2 2025, compared with RMB 33 million in the same period of 2024.
Adjusted net income RMB 427 million in Q2 2025, representing a 30.2% increase year-over-year.
Adjusted EBITDA RMB 610 million in Q2 2025, up by 37.7% year-over-year.
Adjusted net profit margin 17.3% in Q2 2025, representing a decrease of 0.9 percentage points year-over-year due to a rise in the overall effective tax rate.
Adjusted EBITDA margin 24.7% in Q2 2025, remaining stable compared to the same period of 2024.
Cash and cash equivalents RMB 2,716 million as of June 30, 2025, with net cash of RMB 2,649 million.
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Operating Highlights
Hotel Product Innovation: Introduced Atour Series 3.6 and Series 4.0 hotels, focusing on customer needs and experiential consumption. SAVHE Hotel launched as a new upscale brand with a flagship in Shenzhen.
Retail Product Development: Launched Deep Sleep Memory Foam Pillow Pro 3.0, Deep Sleep Thermo-Regulating Comforter Pro 2.0, and Deep Sleep fitted sheet. Retail GMV grew 84.6% YoY to RMB 1,144 million.
Hotel Expansion: Opened 118 new hotels in Q2, reaching 1,824 hotels in operation, a 29.2% YoY increase. Pipeline includes 816 hotels under development.
Retail Market Growth: Retail GMV during June 18 Shopping Festival reached RMB 578 million, up 86% YoY. Atour Planet ranked first in bedding category sales on major platforms.
Operational Efficiency: Gross margin for hotel business expanded to 38.3% in Q2 2025 from 35.7% in Q2 2024. Retail gross margin increased to 53.3% from 50.6%.
Membership Growth: Registered individual members surpassed 102 million, a 34.7% YoY increase. CRS channel accounted for 61.5% of total room nights sold.
Strategic Focus on Sleep Market: Deepened presence in sleep market with product iterations and innovations. Enhanced R&D and supply chain management to lead in sleep experience innovations.
Membership System Enhancement: Launched new gold member growth system to improve member satisfaction and align benefits with usage needs.
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Risk or Challenges
Market Volatility: China's travel market experienced volatility and adjustments in the first half of the year, which could impact demand and operational stability.
Industry Challenges: Despite steady recovery in demand, the travel industry faces challenges during this high-growth cycle, potentially affecting Atour's performance.
Expansion Risks: Rapid expansion with 118 new hotels opened in Q2 and 816 under development could strain resources and operational quality.
Supply Chain Costs: Increased supply chain costs associated with hotel network expansion could pressure profit margins.
Retail Business Growth: Rapid growth in the retail business, with GMV rising 84.6% year-over-year, may lead to operational and supply chain challenges.
Marketing Expenses: Selling and marketing expenses increased significantly, accounting for 15.9% of net revenues, which could impact profitability.
Economic Uncertainty: The external environment remains complex and volatile, posing risks to strategic execution and financial performance.
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Guidance & Outlook
Hotel Network Expansion: The company plans to achieve its strategic goal of 2,000 premier hotels, with 816 hotels currently under development. Expansion efforts will focus on maintaining quality and brand DNA.
Atour Series 3 and 4 Development: The company is focusing on deeper penetration in the upper mid-scale market with Atour Series 3 and 4. Atour 3.6 hotels have been launched and are receiving strong market recognition, while Atour 4.0 hotels are expanding with over 60 hotels under development.
SAVHE Hotel Expansion: The company plans to expand the SAVHE Hotel brand in core business districts of first-tier and new first-tier cities, aiming to create lifestyle landmarks and redefine upscale hotel experiences.
Atour Light Growth: Atour Light 3.3 will be a strategic priority, with a focus on quality-first growth and youth-focused brand positioning to enhance competitiveness in the mid-scale hotel segment.
Retail Business Growth: The company aims to deepen its presence in the sleep market by driving product iterations and category innovations. R&D capabilities, production standards, and supply chain management will be enhanced to support high-quality growth.
Membership Program Expansion: The company plans to refine its ACARD membership system, enhance member benefits, and focus on building emotional connections with customers. A new gold member growth system has been launched to improve satisfaction.
Revenue Growth for 2025: The company expects total net revenues to increase by 30% for the full year 2025, driven by hotel network expansion and retail business growth.
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Shareholder Return Plan
The selected topic was not discussed during the call.
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Key Q&A
Q:Could you share the latest RevPAR trend performance in the third quarter to date and especially during the summer holidays? What's your latest view on the full year RevPAR trend?
A:Entering the summer season, the market exhibited characteristics like rotating travel hotspots and divergent regional performances. Overall demand has not yet recovered to the same period last year, but summer leisure travel showed resilience. RevPAR pressure in Q3 is expected to ease compared to Q2, with a gradual improvement in the full-year RevPAR recovery rate. The industry faces challenges due to increasing market supply, but Atour plans to leverage its experiential advantages, focus on users, and maintain a balanced strategy between OCC and ADR to enhance profitability.
Q:Are there any changes to the 2025 guidance on hotel openings and closures? What is the recent trend in franchise signings? Will increasing competition impact the company's future development plans?
A:In the first half of the year, 239 new hotels were opened, and the pipeline reached 816 hotels. The company is confident in achieving its full-year guidance of 500 new hotel openings and reaching 2,000 premier hotels by year-end. 34 hotels were closed in the first half, with an expected full-year closure of 70-80 hotels. The company will maintain high standards for franchise signings and focus on quality growth. Atour emphasizes quality over scale and plans to enforce strict quality control throughout the hotel lifecycle.
Q:What is the full-year revenue guidance for the retail business? Could you discuss the future development of the retail business, including the rollout pace of new sleep products and any bottlenecks or challenges?
A:The retail business achieved outstanding performance in Q2, and the full-year growth guidance has been raised to 60% year-over-year. New products like the Deep Sleep Memory Foam Pillow Pro 3.0 and Deep Sleep Thermo-Regulating Comforter Pro 2.0 have been launched with positive feedback. Future plans include optimizing the supply chain, strengthening R&D innovation, and maintaining high-quality growth. Challenges include intensifying competition from new entrants and imitators.
Q:What is the company's latest view on the full-year adjusted net income margin? Can it still stay stable at 18% like last year as previously guided?
A:In 2024, the adjusted net profit margin was approximately 18%. This year, the rapid growth of the retail business has shifted the revenue structure, with retail revenue accounting for 38% of the total in the first half, up from 29% last year. The adjusted comprehensive tax rate is expected to rise to 30% this year, affecting the full-year net profit margin. A year-on-year decline in the full-year net profit margin is anticipated.
Q:What are the targets and updates for the SAVHE and Atour Light hotel brands?
A:The SAVHE flagship hotel in Shenzhen achieved a RevPAR exceeding RMB 800 in its first month. Several high-quality projects in key cities are set to open, with a focus on quality-first and controlled expansion. Atour Light 3.0 showed strong performance, with RevPAR recovery outperforming the group's average. The Atour Light 3.3 version has been well-received by franchisees, with strong signing momentum. The company aims to achieve 1,000 Atour Light hotels with a focus on core urban areas and key business districts.
Q:Review of Unclear Management Responses
A:Management avoided directly addressing the impact of increasing competition on the company's future development plans, using vague language about maintaining high standards and focusing on quality growth without providing specific strategies or data.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Foam Pillow
Haijun
Inc Research
Memory Foam
OCC ADR
Planet
Pro
Research Division
SAVHE Hotel
Series
adjustment
campaign
capability
care
city
consumption
customer feedback
cycle
design
effort
environment
experience brand
flagship hotel
forefront
gold member
guest
hotel segment
innovation
momentum category
pace
party platform
pillow
presence
product strength
recognition product
refinement
scale term
selection
support structure
system gold
tier
ATAT Transcript
Atour Lifestyle Holdings Limited (ATAT) Q1 2026 Earnings Call Transcript
Positive5-13
The company demonstrated strong financial performance with a 47.5% YoY revenue increase and solid retail growth. Despite a decline in leased hotel revenue and margin challenges, optimistic full-year guidance and a substantial dividend policy indicate confidence. The Q&A revealed effective management strategies and positive franchisee sentiment. The market cap suggests moderate sensitivity, leading to a positive stock price prediction of 2% to 8%.
Atour Lifestyle Holdings Limited (ATAT) Q4 2025 Earnings Call Transcript
Positive3-17
The earnings call highlights strong retail and managed hotel revenue growth, improved retail gross margins, and strategic hotel network expansion, supporting positive sentiment. Despite a decline in leased hotel revenue and slight net profit margin decrease, the optimistic outlook for franchise signings, continued retail growth, and shareholder value enhancement through dividends and buybacks bolster positive sentiment. However, lack of specific guidance on RevPAR and net profit margin decline slightly temper expectations, resulting in a positive stock price prediction.
Atour Lifestyle Holdings Limited (ATAT) Q3 2025 Earnings Call Transcript
Positive11-25
The earnings call highlights strong financial performance with a 28.7% increase in Adjusted EBITDA and a healthy cash position. The company is expanding its hotel network and retail business, with optimistic guidance of 35% revenue growth. Positive developments include increased dividends, a share repurchase program, and raised retail revenue guidance. Despite increased expenses, the strategic expansion and robust RevPAR trends suggest a positive outlook. The market cap indicates moderate sensitivity, aligning with a positive stock price movement prediction of 2% to 8% over the next two weeks.
Atour Lifestyle Holdings Limited (ATAT) Q2 2025 Earnings Call Transcript
Positive8-26
The earnings call highlights strong financial performance with increased revenues, EBITDA, and a robust cash position. Despite some margin pressures, the company maintains positive guidance and plans significant hotel expansions. The Q&A section reveals management's confidence in overcoming challenges, with innovative product launches and strategic growth plans. A substantial share repurchase program and dividend declaration further boost investor sentiment. Given these factors and the company's market cap, a stock price increase of 2% to 8% is likely over the next two weeks.
ATAT Report
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