Tims China reported a steep miss on both revenue and earnings for the second quarter of 2026, as competition intensified and consumer spending softened. The company posted adjusted net losses of $3.00 per share, well below analyst expectations of a $1.23 loss, while revenue totaled $273.38 million, down 27.27% from the $375.9 million consensus estimate.
Same-store sales declined 17.8% system-wide, with comparable transactions falling 16.3% year-over-year. Revenue in local currency terms dropped 21.7% to RMB 207.4 million, while system sales declined 15.1% to RMB 347.8 million. The adjusted corporate EBITDA margin turned negative at -7.6%, compared with a positive 0.6% in the prior-year period. Monthly average transacting customers fell 20.6% to 2.85 million from 3.59 million a year earlier.
Chief Executive John Chen attributed the underperformance to competitive pressure, noting that Tims China is losing market share to rivals including Guming, Mixue, and Chen Ding. "Second quarter is a period of transition for the company. Results are disappointing," he said. "Top-line revenue and same-store sales were both in significant decline as we are losing share to competition."
The company’s cash position weakened to RMB 121.1 million as of June 30, 2026, down from RMB 129.7 million at year-end 2025. Total debt stood at 84% of total capital, while the current ratio was 0.28. Despite the challenges, digital orders accounted for 91.8% of total orders, up from 90.4% in the prior year.
Tims China received the first $15.8 million tranche of a $55 million secured convertible note financing package from its founding shareholder, Tim Hortons Restaurants International GmbH, in July 2026. The company plans to increase marketing spending in the third quarter, though Chief Financial Officer Albert Lee emphasized that returns on investment, not budget size, will guide allocations. "We will definitely increase our marketing spending... the key measure is return on that spending, not just the size of the budget," he said.
Store operations reflected the broader decline, with 544 company-owned locations as of June 30, down from 566 a year earlier. The net store count rose by two in the quarter, with 15 new Made to Order locations opening and 13 non-MTO stores closing. The company launched 27 new products during the period, including 20 beverages and seven food items, and plans September events such as an Annual Brew Coffee Festival and a Bagel Festival to bolster traffic and brand awareness.
