Net Revenues: RMB1,906 million, up 29.8% year over year, down 8.6% quarter over quarter. Manachised Hotels Revenue: RMB1,032 million, up 23.5% year over year, down 6.7% quarter over quarter. Leased Hotels Revenue: RMB129 million, down 23.5% year over year, down 21.6% quarter over quarter. Retail Business Revenue: RMB694 million, up 66.5% year over year, down 9.3% quarter over quarter. Hotel Operating Costs: RMB736 million, up 11.2% year over year, down 7.3% quarter over quarter. Hotel Gross Margin: 36.6%, up from 34.1% in the same period of 2024. Retail Costs: RMB337 million, up 63.7% year over year, down 12.5% quarter over quarter. Retail Gross Margin: 51.4%, up from 50.5% in the same period of 2024. Selling and Marketing Expenses: 14.8% of net revenues, up from 11.9% in the same period of 2024. General and Administrative Expenses: 4.1% of net revenues, down from 5.0% in the same period of 2024. Technology and Development Expenses: 2.1% of net revenues, up from 1.6% in the same period of 2024. Adjusted Net Income: RMB345 million, up 32.3% year over year. Adjusted EBITDA: RMB474 million, up 33.8% year over year. Adjusted Net Profit Margin: 18.1%, up 0.3 percentage points year over year. Adjusted EBITDA Margin: 24.9%, up 0.8 percentage points year over year. Cash and Cash Equivalents: RMB3,146 million as of March 31, 2025. Dividend: USD0.14 per ordinary share or USD0.42 per ADS, totaling approximately USD58 million. Share Repurchase Program: Up to USD400 million over three years. Hotel Network Expansion: 121 new hotels opened, total of 1,727 hotels, up 32.6% year over year. Retail Business GMV: RMB845 million, up 70.9% year over year. Membership Growth: Registered individual members surpassed 96 million, up 35.4% year over year.

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Release Date: May 22, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Atour Lifestyle Holdings Ltd (NASDAQ:ATAT) reported a 29.8% year-over-year increase in net revenues for the first quarter of 2025. The company opened 121 new hotels in Q1 2025, marking a 24.7% year-over-year increase, and aims to reach 2,000 premier hotels by year-end. Retail business showed strong growth with GMV reaching RMB845 million, up 70.9% year over year, driven by brand strength and customer loyalty. The launch of Atour 3.6 and Atour Light 3.3 has been well-received, enhancing the company's competitiveness in the upper midscale and midscale segments. Atour Lifestyle Holdings Ltd (NASDAQ:ATAT) declared a cash dividend and announced a three-year share repurchase program, demonstrating a commitment to shareholder returns.

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Negative Points

RevPAR decreased by 7.2% year over year in Q1 2025, indicating challenges in maintaining pricing and occupancy levels. Revenues from leased hotels decreased by 23.5% year over year, reflecting a decline in the number of leased hotels due to product mix optimization. Selling and marketing expenses increased to 14.8% of net revenues, up from 11.9% in the same period of 2024, due to investments in brand recognition. Technology and development expenses rose to 2.1% of net revenues, up from 1.6% in the same period of 2024, due to increased investments in technology systems. The company faces ongoing market volatility and uncertainties, impacting RevPAR and overall financial performance.

Q & A Highlights

Q: Could you please share the performance of RevPAR since Q2 and provide an outlook on RevPAR for the full year? A: In Q1, RevPAR decreased by 7.2% year over year due to market volatility. Entering Q2, we observed resilience in leisure travel demand, especially during the Labor Day holiday, which exceeded prior year levels. We anticipate easing RevPAR pressure in Q2 compared to Q1. For the full year, RevPAR faces uncertainty, but we will focus on Atour's differentiated experience to seize core revenue opportunities and maintain long-term brand value. - Jianfeng Wu, Co-Chief Financial Officer

Q: Could you share your view on the new signings momentum and new hotel openings for the full year of 2025? A: In Q1, we maintained positive signing momentum and opened 121 hotels. Despite macroeconomic uncertainty, the hotel industry offers stable cash flow returns, attracting high-quality franchisees. We maintain our guidance of 500 new openings for the year and aim to reach 2,000 premier hotels by year-end, focusing on quality growth. - Haijun Wang, Chairman and CEO

Q: Could you provide an update on the company's retail business and any changes to the full-year revenue guidance? A: Our retail business achieved over 70% year-on-year growth in GMV in Q1. We are raising our full-year retail revenue growth forecast to 50% year over year, driven by strong product launches and promotional campaigns. Consequently, we are increasing our group's full-year revenue growth guidance to 25% to 30% year over year. - Jianfeng Wu, Co-Chief Financial Officer

Q: Could you share some thoughts on the dividend and share buyback program? A: We announced a three-year share repurchase program up to USD400 million and a dividend distribution of approximately USD58 million. We aim to enhance shareholder yield through a comprehensive return program, combining dividends and share buybacks, while ensuring stable capital operations. - Jianfeng Wu, Co-Chief Financial Officer

Q: Could you provide an update on the progression of your upscale brands and strategies for new products? A: Our upscale brand, SAVHE Hotel, will open its flagship hotel in Shenzhen on May 28. In the upper mid-scale segment, Atour 3 and Atour 4 Series will shape our next-generation portfolio. In the mid-scale segment, Atour Lite 3.3 will offer modular design and larger room areas, providing franchisees with more investment options. - Haijun Wang, Chairman and CEO

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.

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