Atour Lifestyle Q2 Earnings Call Highlights

Atour Lifestyle Holdings Limited reported a 41.4% year-over-year increase in Q2 revenue, reaching RMB3.42 billion, largely driven by growth in its managed-hotel division and a 63.2% surge in retail sales. Management affirmed its revenue growth target of 30% for the year and raised its retail growth outlook to 40%.

Hotel performance remained stable, with RevPAR at 100.7% of the previous year's level. The company expanded its hotel network to 2,175 properties, after opening 101 new hotels during the quarter. Plans call for about 80 closures year-over-year. Profit margins, however, weakened due to the rapid growth of lower-margin supply-chain and retail businesses, and increased marketing investments. Adjusted net margin fell to 16.0%.

The company still anticipates a modest decline in net profit margin for the year despite maintaining a cash reserve of RMB3.7 billion.