Atour Lifestyle Holdings (NASDAQ:ATAT) held its first-quarter earnings conference call on Wednesday. Below is the complete transcript from the call.

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Summary

Atour Lifestyle Holdings reported a 47.5% year-over-year increase in net revenues for Q1 2026, reaching RMB 2,811 million, driven by hotel network expansion and retail business growth.

The company opened 110 new hotels, bringing the total to 2,088 in operation, and maintained a healthy development pipeline with 751 projects.

RevPAR showed positive growth, with occupancy rates and average daily rates increasing over the previous year.

Retail revenue saw a 54.4% year-over-year growth, bolstered by strong sales in core categories and continued product innovation.

The company declared a cash dividend of around US$72 million and plans to continue its comprehensive shareholder return policy with dividends and share repurchases.

Management maintains a cautiously optimistic outlook for Q2 RevPAR and has raised full-year retail revenue growth guidance to 30-35% year-over-year.

Full Transcript

OPERATOR

Ladies and gentlemen, thank you for standing by and welcome to Atour Lifestyle Holdings First Quarter 2026 Earnings Conference Call. At this time all participants are in the listen only mode. After the speaker's presentation, there will be a Q and A session. Today's conference is being recorded. I would now like to turn the call over to Mr. Luke Hu, Investor Relations Director. Thank you. Please go ahead sir.

Luke Hu (Investor Relations Director)

Thank you Operator. Good morning and good evening everyone. Welcome to our first quarter 2026 earnings conference call. Today you will hear from our founder, chairman and CEO Mr. Wang Haijun and our EVP Co CFO Mr. Wu Jianfeng. Before we continue, please be aware that this discussion will include forward looking statements and the Federal securities laws and these statements are subject to various risks and uncertainties and actual results may differ significantly from what is stated or implied in our comments today. The Company is not obligated to update any forward looking statements except as required by applicable laws. Additionally, during this call, our management will discuss certain non GAAP financial measures solely for comparison purpose. For a clear understanding of these measures and reconciliation of GAAP to non GAAP financial results, please refer to the earnings release issued earlier today. Furthermore, a webcast replay of this conference call will be accessible on our [email protected] where a copy of the results presentation is also available now. Now I will turn the call over to Mr. Wang, our CEO.

Wang Haijun (Founder, Chairman, and CEO)

Thank you Luke. Hello everyone. Thank you for joining Atour's first quarter 2026 earnings call. Please turn to our slides Entering 2026, China's service consumption is accelerating its transition from scale driven expansion to value driven upgrades centered on quality and experience. Supportive policies are being refined and implemented while industry competition is becoming more rational. Together, these factors are shaping a healthier environment for the consumer market. Against this backdrop, the hotel market has continued its moderate recovery alongside structural upgrades, with development focus shifting toward deeper cultivation of refinement and differentiation. Meanwhile, the retail market is also evolving from traditional manufacturing driven models to an experience driven approach. Consumers are increasingly prioritizing holistic experiences and emotional value over functionality and value for money. At this pivotal moment, we will firmly seize the innovation opportunities arising from these transformations by embedding innovation across every dimension of our products, operations and organization and converting these opportunities into a long term sustainable growth engine. We are also more convinced than ever that our User first philosophy, with experience as our cornerstone and a brand as our anchor, is the fundamental path for Atour to navigate industry cycles. Now I would like to provide more details on our business performance for the first quarter of 2026. Let's begin with our hotel business in the first quarter, performance across our overall hotel portfolio and our mature hotels continued to improve Sequentially. We achieved positive year over year revpar growth primarily driven by a steady increase in adr. This reflects a return to value based competition in a healthier industry environment alongside the steady compounding of our brand equity. In the first quarter our RevPAR was RMB 311.6 representing 102.4% of the level in the same period of 2025. Specifically, OCC reached 100.6% and ADR stood at 102.1% of their levels in the same period of 2025. RevPAR for our mature hotels in operation for more than 18 months was 98.3% of the level in the same Period of 2025, with OCC and ADR at 99.2% and 99.4% respectively of their levels in the same period Of 20. As for our hotel network, we adhered to a quality first principle and maintained strict quality control for every new signing and new hotel opening. Ensuring growth is built on a solid quality foundation. In the first quarter we opened 110 new hotels. By the end of the first quarter our total number of hotels in operation reached 2088. As of the same date, our pipeline of hotels under development remained at a healthy level of 751. On the hotel channel front, our CRS channel continued its steady performance accounting for 63.7% of total room nights sold in the first quarter. The contribution of room nights sold to corporate members was 19.3% during the quarter. At the same time, we are safeguarding the experience of guests who book through our official channels with our price assurance policies including the price drop refund and a best price guarantee as well as various other practical measures during the Chinese New Year holiday. In particular, the seamless execution of these safeguards earned widespread positive feedback from users. This reflects our long term commitment to deepening our membership operations and strengthening member loyalty while also representing our consistent commitment to providing users with a more reassuring experience. As our hotel network expands and our brand strength steadily grows, our supply chain capabilities are advancing. In parallel, more high quality suppliers are joining our supply chain network. The platform's offerings are becoming more diverse and franchisees are increasingly willing to consolidate their procurement with us. We want our supply chain business to consistently deliver long term value in two aspects. First, by empowering our franchisees and suppliers with high quality products at attractive value, helping them improve procurement efficiency and enhancing the overall franchisee experience. Second, by ensuring a consistent state experience for users, giving them greater convenience and a peace of mind when using our products, we adhere to our eight commitments to supply chain procurement, establishing reliable mechanisms across pricing, after sales, service and customer care. At the same time, we are deepening collaborative R and D with upstream suppliers to improve the practical functionality of existing products and develop new ones that deliver greater value. We will take innovation as our driving force to continuously enhance the core capabilities of our supply chain, jointly elevating the value of the Atour brand. Next, I would like to share the latest developments across our hotel brands and In a highly competitive hotel market, ATUR pioneered and continues to lead the upper mid scale segment. Over the past decade we have earned strong customer word of mouth and steadily built clear resilient brand mindshare. This long term commitment has enabled us to build differentiated competitive advantages that are difficult to replicate, supporting our resilience and sustainable growth through ever changing market conditions. A tour 3.6 our latest attour hotel product was built around a systematic redesign of the key moments in the guest journey grounded in an in depth deconstruction of real guest experiences. This has allowed us to create a verifiable and scalable operational standard and a product model. Since its launch over a year ago, Ator 3.6 has continued to receive positive market feedback validating our product competitiveness in the upper mid scale market. Atour Origin represents our continued effort to explore and expand the possibilities of of the upper mid scale segment and marks a concrete step forward in our brand led excellence strategy. Going forward, we will continue to refine Attour Origin with a long term mindset while advancing more refined operations and quality upgrades. We will roll out the deep sleep system hotel wide and further integrate cultural elements and service details from Yunnan. We hope Attour Origin will bring the tranquil strength rooted in Yaduo village to more corners of urban life, further enriching what the Chinese experience represents. In the first quarter, RevPAR of Atur origin hotels in operation exceeded RMB 400. The two upper mid scale brands developed in parallel forming a differentiated and complementary price tier. For the upscale brand. Sahe Hotel continues to build brand visibility and recognition while expanding its development potential. In the first quarter, RevPAR of Sahe Hotels in operation exceeded RMB 910 with ADR surpassing RMB 1000. Meanwhile, SAHE has attracted a more diverse customer base with a higher proportion of international customers and family travelers on overseas review platforms and social media. Sahe has also received a growing number of organic recommendations and positive reviews from international users. This demonstrates the unique appeal of Sahe's deep Chinese cultural roots and opens up broader possibilities for its future development. We are taking a long term view on SAP. We will continue to drive brand upgrades bringing China's homegrown philosophy and expression of upscale living to a broader global audience. Sahu's development calls for patience. We will remain disciplined in scale, pursue continuous refinement in product and service and translate our long term vision into every tangible experience. Demand for more differentiated stay experiences continues to grow, an opportunity that aligns closely with Attour Lite's positioning. Attour Lite continued its steady long term trajectory in the first quarter. On the customer side, Attour Lite has been attracting a more diverse customer base, gaining increasing recognition among younger users while steadily broadening its business traveler base. This has further built the brand's differentiated momentum. Attour Lite 3.3 has now opened in more than 20 hotels. It enhanced the product experience and more efficient operating model have earned strong recognition from both customers and franchisees. Operationally, a Tour Lite 3.3 has demonstrated stronger pricing power. In the first quarter, RevPAR of Atura Lite 3.3 hotels in operation was more than 10% higher than that of the 3.0 version. We fully recognize that brand development is not built overnight. It requires us to first focus on product refinement and operating system development so that we can build strong brand equity and support healthy sustainable growth. In 2026. We will continue to comprehensively and systematically enhance to our Light's operational efficiency and product competitiveness and continue to focus our expansion on second tier and above cities pursuing quality led expansion and laying a more solid foundation to for the next stage of Atur Light's development. Moving on to our retail business entering 2026, Atour's retail business sustained its strong growth momentum with core categories continuing to deliver outstanding performance. Retail revenue reached RMB 1,071,000,000 in the first quarter representing 54.4% year over year growth. Atour Planet also ranked among the top brands in the betting category on major third party platforms. With our product and a brand strength continuously being validated by the market, We recognize that maintaining long term competitiveness requires continuous innovation, responding faster and more precisely to meeting the evolving needs and expectations of our users. As our understanding of users sleep needs deepens, we are steadily turning latent demands into tangible product strength. We approach each product iteration as a systematic solution grounded in scientific testing and validation as AturPlanet's product capabilities continue to grow, we are proud to enter a new stage defined by the technological innovation and standard setting. In the pillow category, Hatura Planet maintained its strong and clear leadership in the first quarter, consistently ranking first in category sales on major third party platforms. We have remained guided by genuine sleep need, integrating this principle into every product upgrade within the pillow category, consistently building a strong word of mouth. During the Chinese New Year, we launched a special edition of the Deep Sleep Memory foam pillow Pro 3.0. Paired with a supporting brand campaign, we sought to turn a sleeping product into a meaningful expression of emotion, helping users rest fully in body and mind during the holiday and fall naturally into Deep Sleep. For our Comforter category Market share is steadily increasing with very strong growth continuing into the first quarter. The Deep Sleep Thermoregulating Comforter series has consistently achieved strong sales and garnered significant user preference with cumulative sales exceeding 3 million units since its launch. At the end of March, we launched the latest upgrade in the series, the Deep Sleep thermoregulating Comforter Pro 3.0 summer season. This new generation delivers systematic improvements in dynamic temperature and humidity control featuring a fully upgraded two way temperature regulation technology that helps smooth out temperature fluctuations. Its moisture absorption and permeability have also been enhanced with each innovation cycle. In the Comforter category, our product strength continues to improve enabling us to more precisely capture users pain points and translate them into practical applications through enhanced R and D capabilities. Within just 45 days of launch, the Gross Merchandise Value of Deep Sleep thermoregulating Comforter Pro 3.0 summer season exceeded RMB 100 million. For new categories. Sales momentum also has been very positive. Recently we launched the Summer edition of the Deep Sleep Launchwear in line with the season and introduced the new color options for the Deep Sleep fitted sheet. As our sleep ecosystem continues to evolve, Hatua Planet's product mindshare among users is becoming stronger and the trust between the brand and users is reinforced through each experience. Turning to membership by the end of the first quarter our registered individual members reached 116 million representing a 20% year over year increase in 2026. We will continue to focus on Deep Sleep as a core scenario, deepening the synergy between our hotel and retail businesses to enhance members sense of membership value and benefits. At the same time, we are actively exploring partnerships with like minded brands jointly creating expanded quality lifestyle experiences. We hope ATOR membership will continue to evolve as a lifestyle membership brand that accompanies users with warmth, helping every member find experiences where body and mind return to inner peace. Finally, I would like to share Atour's progress on ESG. We recently released the Atur Group 2025 ESG report. Atur started from Yaduo Village in Yunnan and we have always been dedicated to a founding aspiration of doing good. Over time, this simple goodwill has become the spiritual foundation of of atul's growth. We have embedded ESG principles into our corporate mission and core values, continuously enhancing our ESG governance and advancing environmental responsibility across our hotel and retail operations through industry support and social assistance programs. We continue to give back to Yado Village and the surrounding communities, Fostering goodwill and extending warmth. At the end of 2025, we officially established the Atour Foundation with a goal of advancing public welfare in a more systematic way. Extending care to people recently we launched a dedicated public welfare program focused on frontline housekeeping staff, open not only to our own employees but also to housekeeping professionals across China's service industry. Guided by our belief that everyone deserves kindness, aimed to extend ator's warmth to the broader industry and enable these connections of goodwill to generate a more far reaching impact. Grounded in the present and looking to the long term, we will continue to upload our mission of creating an intimate ambience where people can warmly connect, stay true to our founding aspiration and fulfill our corporate responsibilities. We will remain committed to doing the right things with warmth, steadily move toward our long term vision of a timeless tour warmth along every journey and continue to contribute steadfast and warm strength to the industry and society. I will now turn the call over to our CO CFO, Mr. Wu Jianfeng who will discuss our financial results.

Wu Jianfeng (EVP Co CFO)

Thank you. Hai Jun hello everyone. I would like to present the company's financial performance for the first quarter of 2026. Our net revenues for the first quarter of 2026 grew by 47.5% year over year to RMB 2,811 million. Revenues from our managed hotels for the first quarter of 2026 got by 51.9% year over year to RMB 1,568 million. The increase was primarily fueled by the ongoing expansion of our hotel network as well as supply chain business development. Revenues contributed by our leased hotels for the first quarter of 2026 decreased by 8.0% year over year to RMB 118 million. The decline was primarily due to a decrease in the number of leased hotels as a result of our product mix optimization. The total number of our leased hotels decreased from 25 as of March 31, 2025 to 19 as of March 31, 2026. Revenues from our retail business for the first quarter of 2026 increased by 54.4% year over year to RMB 1,071 million. The growth was driven by increasing brand recognition, successful product innovation and broadened broadened range of product offerings. Gross profit of our hotel businesses for the first quarter of 2026 increased by 29.5% year over year to RMB 550 million. The decline in the gross margin was primarily due to the changes in the revenue structure. Gross profit of our retail business for the first quarter of 2026 increased by 58.3% year over year to RMB 564 million. The increase in the gross margin was attributable to the increasing contribution from higher margin. Products selling and marketing expenses accounted for 14.3% of net revenues for the first quarter of 2026 compared with 14.8% of the same period of 2025. The decrease was made primarily due to improved efficiency of investment in our retail business. General and administrative expenses, excluding share based compensation Expenses accounted for 4.2% of net revenues for the first quarter of 2026 compared with 4.1% for the same period of 2025. Technology and development expenses accounted for 1.8% of net revenues for the first Quarter of 2026 compared with 2.1% for the same period Of 2025. Adjusted net profit margin for the first quarter of 2026 was 17.4%, representing a decrease of 0.7 percentage points year over year. Adjusted EBITDA margin for the first quarter of 2026 was 25.5%, increased by 0.6 percentage points year over year. We maintained a healthy cash position. As of March 31, 2026, cash and cash equivalents totaled RMB 3.7 billion with net cash of RMB 3.4 billion today. In accordance with our annual dividend policy, we declared the first cash dividend of 2026 totaling around US$72million as a reward for our shareholders trust and support. That concludes our financial highlights for the first quarter of 2026 and for the full year of 2026. We currently expect total net revenues to increase by 24% to 28% compared with the full year of 2025. Now let's open the floor for Q and A.

OPERATOR

Thank you. We will now begin the question and answer session. To ask a question, please press star one and one on your telephone and wait for a name to be announced for the benefit of all participants on today's call. If you raise your questions in Chinese, please immediately repeat your questions in English. Please limit your questions to one at a time. If you wish to have follow up questions, please rejoin the queue. One moment for the first question. Your first question comes from the line of Sijie Lin of cicc. Please go ahead.

Sijie Lin (Equity Analyst)

Thank you. Management, congrats on another strong quarter. So we noticed a faster pace of hotel closures in Q1, so want to know whether that will affect the full year closure targets and additionally, is there any change regarding the guidance on new openings? Thank you.

Wang Haijun (Founder, Chairman, and CEO)

Thank you. Sijie, let me answer your question. In Q1 we had a relatively more concentrated pace of closures with a total of 37 hotels being closed. The main reason was that some projects we had confirmed last year to be closed were carried over to this year for finalization and resulting in that lag in the numbers for our full year target for hotel closures this year remains unchanged at 80 hotels and moreover, thanks to the proactive structural adjustments we initiated last year, the quality of our operating hotels now has clearly improved. And in this process, we have also gradually sorted out and established a set of long term mechanisms for older hotels that have been in operation for many years. We will provide targeted support and customized renovation plans to lower the barrier to upgrading along with partial fee waivers and financial support policies to effectively help these older hotels enhance their market competitiveness. And as for new openings, we are proceeding steadily according to our planned pace and adhering to the premier hotel logic. Newly opened hotels must be the ones that have met our positioning and can provide high quality experience for guests. As of the end of Q1, we had 751 projects in the pipeline ensuring an ample and high quality reserve. Therefore, we are maintaining our full year hotel opening target unchanged. Thank you. Thank you.

OPERATOR

Sijie. Next question please. Questions. One moment for the next question. Our next question comes from the line of Dan Chi of Morgan Stanley. Please go ahead.

Dan Chi (Equity Analyst)

This is Dan from Morgan Stanley. My question is about revpar trend for Q2. Can the management share some color with us and whether there's any change in the management's visibility on the full year Revpar outlook. Thank you.

Wang Haijun (Founder, Chairman, and CEO)

Thank you Dan. Entering Q2, we had observed that leisure travel remained strong in particular spring break in some regions during April further boosted travel demand and the more dispersed travel schedule has led to a more balanced distribution of holiday passenger flows. However, when we look ahead. Market volatility still exists. Therefore, we maintain a cautiously optimistic attitude about revpar performance in Q2. As for long term trends, we also see various proactive policies continuously to unlock the potential of service consumption and injecting strong vitality of consumption into the industry. Although changes in the external environment may cause short term fluctuations in the travel market and the accommodation industry as a whole remains in a stage of fluctuating recovery. Against this backdrop, we will not deliberately pursue short term performance. Instead, we will strategically expand our reach to a broader range of business travelers and leisure travelers, continuously refine our service to details that guests can truly feel and make a tour the most reassuring and reliable choice for travelers when staying.

OPERATOR

Thank you Dan. Next question please. Moment for the next question. Our next question comes from the line of Lydia Lin of City. Please go ahead.

Lydia Lin (Equity Analyst)

Hi management and this Lydia from Citi. So could you share with some like the whole franchise sentiment on the opening recently and also whether your company make any changes to your signings strategy? Thank you.

Wang Haijun (Founder, Chairman, and CEO)

Thank you Lydia. In March we mentioned that the market was gradually returning to rationality and the franchisees are adopting a more mature mindset so they are not over optimistic nor anxious about short term fluctuations. And regarding our signing strategy, first, we will continue to strengthen our presence in the core cities in prime commercial areas across China, capturing the fundamental demand from high frequency business travel and urban cultural tourism. On the other hand, we are selectively capturing the growth opportunities from leisure demand, for instance in key potential markets such as strong third tier cities and cities with 5A-rated scenic spots that generate stable visitor flows. In these promising areas with solid market foundations and long term growth potential, we are carefully selecting projects with strong development prospects. Thirdly, in the long run, the quality of signed projects is of critical importance. However, there is no consensus in the market on what quality truly means. Let me take this chance to introduce to you the Atour's concept of quality. Our concept of quality goes beyond mere hardware upgrades and structural improvements. It is rather rooted in experience and aims to build a comprehensive quality composite. Leading product strength is the foundation, the ability to open hotels in the core areas is a key capability and the continuous refinement of experience is our competitive moat. Such a quality philosophy leads to one important outcome. Our pricing power is not achieved through cost cutting, but it is earned through guest perception. This gives us the ability to continuously pushing pricing boundaries upward. New brands like Sahe Hotel and Atour Origin have emerged upon this logic. They are not replacements for existing products of Ours but rather the expansion of the Ature brand Imaginative Horizon. Thank you.

OPERATOR

Thank you Lydia. Next question please. Moment for the next question. Our next question comes from the line of Sing Chen of ubs. Please go ahead.

Cheng Qing

Let me translate to English. This is Cheng Qing from UBS and my question is about retail business Q1 retail revenue outperformed the market practitioners what factors have contributed to the sustained popularity of your new products? Given the positive trend, has management provided any update to the full year retail revenue guidance.

Wang Haijun (Founder, Chairman, and CEO)

Thank you Chen Xing the growth of our retail business is not just about the numbers. So right now what I really want to share is our product methodology behind this growth. Let me give you one example. Let's take the Deep Sleep Thermal Regulating Comforter Pro summer season series as an example. When we launched its first generation three years ago, we changed the traditional duvet cover design and created a one piece design with a cool to the touch feel on both sides. That was a product structural innovation. As I think with the second generation we realized that users real need for coolness is not about extreme coldness but a naturally comfortable refreshing feel. So we re engineered the ventilation system and the fabric structure upgrading from passive cooling to activate temperature control plus moisture wicking. This second generation is demand driven innovation. When we launched the third generation this year, we targeted the pain point of fluctuating indoor temperatures in summer aiming to create a dynamic system that actively responds to environmental changes. So the third generation further improves dynamic temperature control and humidity control. This is what I think has deepened scenario driven innovation. After these three iterations, the definition of our product has fundamentally changed from a cool comforter to an air permeable comforter and then to a comforter that breathes. What drives this change are the repeatedly validated needs that emerge from real user scenarios. This example of comforter is also the methodology of our retail business. Each iteration transforms previously vague user sensations into a definable, measurable and a replicable technical standard. So after these three iterations we've now come to realize that the most insurmountable moat is not a specific material or patent but rather the systematic capability to continuously stay close to users and constantly translate their feelings into standards.

OPERATOR

Thank you Shenzhen. Next question please.

Wang Haijun (Founder, Chairman, and CEO)

Also let me add to the retail revenue guidance you asked about. Thanks to the solid groundwork laid in the first quarter and the strong sales momentum of our new products, we are confident that we will surpass our previous announced full year revenue target. Therefore, we are raising our full year retail revenue guidance to grow 30% to 35% year on year. Thank you.

OPERATOR

Thank you. Chenxin. Next question, please.

Ji Wei Liu

Thank you for the questions. We will now take the last question coming from the line of Ji Wei Liu of Citix. Please go ahead. I translate my question in English from CTICs. We noticed that you had also announced student plan for the first half year. Could you share whether there have been any changes or developments in the shareholder return policy? Thank you.

Wang Haijun (Founder, Chairman, and CEO)

Thank you. Jiyue. Regarding shareholder returns, we have always placed great importance on this. Today we also announced our first dividend distribution plan for this year with a total amount of approximately US$72 million, representing about 31% of the previous year's net profit. In addition, since we began repurchases last year and as of Q1 this year, the total repurchase amount has exceeded US$100 million. Going forward, we will continue to follow our comprehensive shareholder return plan that combines dividends and share repurchases, still targeting approximately a 100% payout ratio based on the previous fiscal year's GAAP net profit as our shareholder return policy. Thank you.

OPERATOR

Thank you. That concludes today's question and answer session. I would like to now turn the conference back over to Mr. Luke for any additional or closing comments.

Luke Hu (Investor Relations Director)

Thank you for joining us today. If you have any further questions, please feel free to contact our IR team. We look forward to speaking with you again next quarter. Thank you and goodbye.

Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company's SEC filings and official press releases. Corporate participants' and analysts' statements reflect their views as of the date of this call and are subject to change without notice.