Guming’s H1 Revenue Surges 32% as Coffee Drives Store Performance
TREE NEWS reports: Chinese freshly-made tea and coffee chain Guming Holdings (also known as Guming) reported a 31.9% year-on-year increase in first-half revenue to RMB 7.47 billion, while adjusted profit rose 44.4% to RMB 1.568 billion. The company’s adjusted core operating margin expanded to 23.2% from 19.9%, and gross margin improved to 33.4% from 31.5%. These results underscore the resilience of the company’s expansion strategy, even as the broader bubble tea market faces intense competition and store closures.
News Summary
As of the end of June, Guming operated 14,351 stores, adding 1,318 new locations while closing 521, for a net increase of 797 stores. The company’s average daily sales per store rose to RMB 7,800 from RMB 7,600, and daily cup volume edged up to 440 from 439. Management attributed the improvement to a stronger coffee product lineup and the expansion of breakfast offerings, which helped offset reduced subsidies from third-party delivery platforms.
Guming has aggressively pushed into coffee, with over 12,000 stores equipped with coffee machines by end-2025 (nearly 90% coverage), and that figure rose to about 13,500 (94% coverage) by mid-2026. The company launched 51 new products in the first half, including 12 coffee items. Management aims to increase average daily coffee sales per store from around 80 cups in 2025 to about 120 cups in 2026.
Market Impact Analysis
For investors, Guming’s results highlight a strategic pivot from pure tea to a broader beverage platform. The coffee expansion is not just a product line extension but a way to attract new customer demographics (e.g., office workers over 35) and capture morning traffic, a traditionally weak period for tea shops. This diversification could support same-store sales growth and improve unit economics, which is critical as store expansion slows.
However, the company faces headwinds: store closure rates are rising (3.84% in H1, up from ~3.07% a year earlier), and the industry is seeing net store closures across major brands. Guming’s management guided 2026 openings of roughly 3,000–4,000 stores, but H1 additions (1,318) suggest they may fall short of that range. The competitive environment is intensifying, with 47 major tea and coffee brands adding 4,560 stores but closing 6,902 in July alone.
For the broader market, Guming’s performance is a bellwether for the Chinese consumer discretionary sector. If coffee and breakfast offerings can sustain store-level productivity, it could signal that premiumization and product innovation are viable strategies even in a weak consumer environment. Conversely, if store closures accelerate, it may indicate that the tea chain industry is reaching saturation, which could pressure valuations of similar companies.
Key Takeaways for Investors
- Diversification pays off: Coffee and breakfast items are lifting store sales, suggesting that menu innovation can drive growth even when store count growth slows.
- Watch store metrics: Same-store sales and closure rates are more important than total store count. Rising closures could signal market saturation.
- Margin expansion is positive: Improved gross and operating margins indicate operational efficiency gains, which could support profitability despite competitive pressures.
- Industry context matters: The broader tea and coffee market is seeing net closures, so Guming’s ability to outperform peers is key.
- Consumer spending trends: As a discretionary play, Guming’s results offer insights into Chinese consumer confidence and spending habits.
