Chagee (NASDAQ:CHA) Announces Quarterly Earnings Results, Beats Estimates By $0.04 EPS

Chagee (NASDAQ:CHA) issued its quarterly earnings results on Friday. The company reported $0.37 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.33 by $0.04, FiscalAI reports. Chagee had a return on equity of 16.75% and a net margin of 10.23%.The firm had revenue of $502.59 million during the quarter.

Here are the key takeaways from Chagee’s conference call:

• Domestic performance softened: Q2 GMV fell 3.3% sequentially to RMB 7.66 billion, with Greater China GMV down 4.5% and average monthly GMV per store declining to RMB 338,259.
• Profitability and cost discipline improved: GAAP net margin rose to 13.6% from 2.3% a year earlier, while non-GAAP G&A and sales-and-marketing expense ratios declined substantially; the company reported its 14th consecutive quarter of positive net income.
• Product innovation is supporting customer acquisition: Chagee launched a record 17 products in Q2, while Geelato pilots lifted offline GMV by more than 20% and Lemon Tea Latte increased first-time member acquisition by 45% during its launch period.
• Overseas expansion remained a major growth engine: Overseas GMV increased 114.3% year over year and 18.2% sequentially to RMB 504 million, with the company entering South Korea and expanding to 399 international stores across eight markets.
• Management expects recovery in the second half: July same-store sales declined by only low-single digits and August is expected to turn positive year over year; Chagee has also repurchased approximately $30 million of shares under its $150 million authorization and is evaluating regular dividends.

Chagee Stock Performance

NASDAQ CHA traded up $0.81 during trading hours on Monday, hitting $11.61. 3,212,217 shares of the company’s stock were exchanged, compared to its average volume of 632,610. The firm has a market capitalization of $2.13 billion, a P/E ratio of 11.50 and a beta of 1.57. The business’s 50 day moving average is $11.05 and its 200-day moving average is $10.80. Chagee has a 12-month low of $8.98 and a 12-month high of $20.57.

Analyst Upgrades and Downgrades

A number of equities analysts recently commented on CHA shares. Zacks Research upgraded Chagee from a “strong sell” rating to a “hold” rating in a research report on Monday, June 1st. Morgan Stanley reaffirmed an “overweight” rating and set a $15.50 target price on shares of Chagee in a report on Friday, May 29th. The Goldman Sachs Group began coverage on shares of Chagee in a research report on Sunday, June 21st. They set a “neutral” rating and a $13.60 target price for the company. Wall Street Zen cut Chagee from a “strong-buy” rating to a “buy” rating in a report on Sunday, July 12th. Finally, Weiss Ratings downgraded Chagee from a “sell (d+)” rating to a “sell (d)” rating in a report on Thursday, July 30th. Two analysts have rated the stock with a Buy rating, five have issued a Hold rating and one has assigned a Sell rating to the stock. According to data from MarketBeat.com, the stock has a consensus rating of “Hold” and an average price target of $14.68.

Hedge Funds Weigh In On Chagee

Several hedge funds have recently added to or reduced their stakes in CHA. Fosun International Ltd boosted its holdings in shares of Chagee by 19,295.0% in the 4th quarter. Fosun International Ltd now owns 7,447,088 shares of the company’s stock valued at $86,610,000 after purchasing an additional 7,408,691 shares in the last quarter. UBS Group AG boosted its holdings in shares of Chagee by 212.5% during the 3rd quarter. UBS Group AG now owns 984,755 shares of the company’s stock valued at $16,298,000 after purchasing an additional 669,583 shares during the last quarter. Marshall Wace LLP bought a new stake in shares of Chagee during the fourth quarter valued at approximately $5,407,000. Jane Street Group LLC raised its stake in Chagee by 2,237.0% in the 4th quarter. Jane Street Group LLC now owns 439,640 shares of the company’s stock worth $5,113,000 after acquiring an additional 420,828 shares during the last quarter. Finally, Renaissance Technologies LLC purchased a new position in Chagee in the 1st quarter valued at about $2,511,000.

About Chagee

Our Mission With every cup of our tea, we aspire to foster a global connection of people and cultures. Our Vision To modernize the tea-drinking experience through technology and innovation. Our Core Values “Customer First” is the foundational philosophy of how we make decisions and run our business. “Caring for Partners” is the core value that defines how we interact with consumers, franchise partners, suppliers, and employees. “Quality, Health, and Convenience” is the guiding principle of how we make our products.