The second quarter of the financial year saw Chinese milk tea chain Chagee experiencing a double-digit increase in revenue, largely due to its network expansion. However, this growth was accompanied by a notable drop in profit.
Chagee, which is listed on Nasdaq, recorded a 10.5 per cent rise in net revenues to RMB3.331 billion (US$465.1 million) for the quarter ending on June 30. The company’s teahouse network witnessed substantial growth of 40 per cent, reaching 7038 locations.
The total gross merchandise value (GMV) also saw an increase, rising by 15.5 per cent to RMB8.103.1 billion. The GMV in overseas markets experienced a significant surge of 77 per cent. However, the same-store GMV witnessed a downturn, falling by 23 per cent following a 38 per cent growth in the same period last year.
Chagee’s GAAP net income saw a steep decrease of 87.7 per cent to RMB77.2 million. However, the non-GAAP net income, which factors in share-based compensation expenses amounting to RMB552.5 million, saw a marginal rise of 0.1 per cent to RMB629.8 million.
During the same quarter, Chagee made key leadership appointments to boost its expansion capabilities in North America. These included the appointment of Emily Chang as the Chief Commercial Officer and Aaron Harris as the Chief Development Officer for the region.
Company management is optimistic about its comprehensive international expansion strategy. This strategy is expected to set the company on a path of sustainable growth. There are proactive strategies already in place for key regions like Indonesia, Thailand, and North America. Additionally, the company has plans to venture into Japan and Korea in the coming year.
What changes were observed in Chagee’s revenue and profit in the second quarter?
Chagee witnessed a double-digit rise in revenue, largely due to the expansion of its network. However, its profit saw a significant drop.
What significant appointments were made by Chagee in the second quarter?
Chagee appointed Emily Chang as the Chief Commercial Officer and Aaron Harris as the Chief Development Officer for the North American region.
What are the company’s future expansion plans?
Management has comprehensive international expansion strategies in place. There are plans for expansion in key regions including Indonesia, Thailand, and North America, and the company intends to enter the Japanese and Korean markets next year.
