Chagee reports significant profit growth amid international expansion

Chagee, the US-listed milk tea chain, reported a significant increase in profitability for the second quarter ending June 30. Net income rose to RMB464.8 million (US$68.5 million) from RMB77.2 million in the same period last year, while operating income surged 387.6 per cent to RMB524.7 million.

Revenue for the quarter grew 2.5 per cent to RMB3.4 billion (US$503.3 million), supported by an 8.5 per cent increase in the total number of stores, bringing the network to 7,639 teahouses. While gross merchandise value (GMV) grew 114.3 per cent across eight international markets, sales in the core Greater China market fell by 9 per cent.

Despite declining same-store sales in China, the company reported strong initial results in South Korea, where three Seoul-based locations sold over 16,000 cups in their first three days. Management indicated that the decline in same-store sales in China appeared to ease in July, with expectations for positive growth in August.