Tims China, the exclusive operator of Tim Hortons coffee shops in China, has reported a net loss of 174.5m yuan ($25.4m) for the first quarter of 2023, compared to a net loss of 151.3m yuan ($21.3m) a year ago.
For the quarter ended 31 March 2023, the company’s revenues rose almost 50% year-on-year to 336.5m yuan ($47.5m).
Company-operated store costs and expenses were 336.5m yuan ($49m) for the quarter, a surge of 24.6% compared with the year-ago period.
The coffee shop operator revealed that it opened 31 net new stores in the quarter. Except for four new stores added in the first quarter, all are franchise locations.
There are now 648 Tims outlets across China, 551 of which are company-owned and operated.
However, the company plans to accelerate the development of its franchise network as it seeks additional outlet expansion in the second quarter.
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Tims China CEO and director Yongchen Lu commented: “We are pleased to have set a new record for quarterly revenues while achieving positive adjusted store EBITDA in the first quarter of 2023.
“Despite the difficult circumstances brought on by the high number of Covid-19 infection cases across the country in January, our team’s diligence, continuous innovation, and creative marketing contributed to our strong recovery with customer demand returning after the Chinese New Year, as evidenced by 17.1% and 19.4% same-store sales growth for company owned and operated stores in February and March, respectively.
Lu continued: “We have also accelerated the development of our franchised stores, especially with our partner Sinopec Easy Joy, the largest convenience store network in China with more than 27,800 locations, through the rapid expansion of Tims Express, our most compact store format, and are on track to surpass 1,000 system-wide stores by year-end. We would like to sincerely thank our loyalty club members, numbered 12.4 million as of 31 March 2023 and ever-growing.
“Their unwavering support has been a constant source of inspiration, encouraging us to strengthen the reputation of our brand and to deliver high-quality products and services through offering true local relevance, continuous innovation, genuine community and absolute convenience.”