Super Hi operating profit jumps 119% as overseas Haidilao traffic and delivery revenue accelerate

Super Hi International Holding Ltd. reported a significant improvement in second-quarter operating performance as revenue increased 10% year over year to $218.8 million and operating income surged 118.9% to $8.1 million. Operating margin nearly doubled to 3.7% from 1.9%, supported by higher restaurant traffic, stronger table turnover and tighter cost control across the company’s international Haidilao network. Total guest visits increased 5.2% to more than 8.1 million, while the restaurant count reached 129 and delivery revenue more than doubled as management broadened revenue beyond dine-in hot pot. Reported earnings told a different story, however, as a $20.6 million increase in net foreign-exchange losses pushed Super Hi to a $1.9 million quarterly loss compared with a $16.4 million profit a year earlier.

The divergence between operating income and net income makes Q2 an unusually useful test of the company’s underlying turnaround. Restaurant economics strengthened across several operational measures even though currency fluctuations obscured that improvement at the bottom line. Super Hi shares were trading around $14.10 during August 26, roughly 1% above the previous close, suggesting investors were giving more weight to stronger operations than to the foreign-exchange-driven loss.

The quarter also shows Super Hi becoming less dependent on conventional restaurant sales. Haidilao restaurant revenue grew only 4.6%, while delivery revenue increased 105.4% and other revenue rose 119.7%, creating a more diversified growth profile as management develops packaged products, local delivery channels and secondary restaurant brands.

Higher table turnover and 8.1 million guest visits strengthen Haidilao’s overseas restaurant economics

Haidilao restaurant revenue increased to $197.8 million from $189.1 million, supported by higher customer traffic and continued optimization of restaurant operations. Super Hi served more than 8.1 million guests during Q2, up from 7.7 million a year earlier, while overall average table turnover improved to 3.9 times per day from 3.8.

Same-store table turnover also improved to 4.0 times per day from 3.9, indicating that the gain was not simply the result of opening more locations. Higher utilization at existing restaurants is particularly important for restaurant profitability because labor, rent and other fixed costs can be spread across more customers without requiring proportionally higher spending.

The regional picture was uneven. Southeast Asia remained Super Hi’s largest market with 73 restaurants and 5.3 million guest visits, while East Asia operated 22 restaurants and North America also had 22 locations at the end of June. East Asia achieved the highest average table turnover at 4.9 times per day, while North American turnover fell to 3.6 times from 4.0.

North America nevertheless produced the highest average spending per guest among the major regions at $41, up from $39.10 a year earlier. Southeast Asian spending remained stable at $18.60, while East Asian spending fell to $27.40 from $29.40, showing that Super Hi is balancing differences in customer frequency, pricing and local market economics across a geographically diverse restaurant network.

Same-store sales provide a more cautious signal than the headline traffic increase. Aggregate same-store revenue edged down to $179.4 million from $180.9 million, while average daily same-store revenue slipped to $17,800 from $17,900. The improvement in table turnover therefore has not yet translated into broad same-store revenue acceleration, making pricing and guest spending important variables alongside traffic.

That tension is most visible in North America, where same-store sales declined to $34.7 million from $37.9 million and average daily revenue per same-store fell to $20,100 from $21,900. Stronger spending per guest partly offsets that pressure, but the region still needs improved traffic and table utilization to deliver stronger restaurant-level growth.

Operating margin nearly doubles as staffing costs grow more slowly than revenue

The most important financial improvement occurred below the revenue line. Operating income increased to $8.1 million from $3.7 million, while operating margin expanded by 1.8 percentage points to 3.7%, showing considerably stronger conversion of incremental revenue into operating profit.

Staff costs increased 6.7% to $75 million, slower than the 10% increase in revenue, and fell to 34.3% of revenue from 35.3%. Super Hi continued hiring to support restaurant expansion and customer service, but the improved ratio suggests that revenue growth and management initiatives are generating better labor productivity.

Raw-material and consumable costs increased 10.5% to $74.7 million, almost exactly in line with revenue growth. As a percentage of sales, the expense remained essentially unchanged at 34.1% compared with 34.0%, indicating that food and product costs were not a major contributor to the margin improvement.

The operating leverage therefore came mainly from areas where management has greater control, including staffing efficiency, restaurant management and broader cost optimization. This is an important distinction because a restaurant company can sometimes report better margins simply because ingredient prices fall, while Super Hi’s Q2 improvement appears more closely tied to operating execution.

That does not mean current margins are high in absolute terms. A 3.7% operating margin still leaves relatively limited room for error if labor, food, rent or promotional expenses rise sharply, particularly across countries with different wage structures and inflation trends.

The central earnings question is therefore whether Super Hi can continue expanding margins as restaurant traffic grows. If table utilization continues improving while staffing and other operating expenses rise more slowly than revenue, a relatively small increase in restaurant-level efficiency could produce disproportionately stronger operating profit.

Delivery and packaged products are emerging as faster-growing businesses than dine-in restaurants

Super Hi’s delivery business generated $7.6 million of Q2 revenue, increasing 105.4% from $3.7 million. Management attributed the expansion to new products, promotional activity, wider delivery channels and deeper relationships with local food-delivery platforms.

The segment remains small relative to nearly $198 million of restaurant revenue, but its growth rate gives the company another way to monetize the Haidilao brand without requiring customers to visit a restaurant. Delivery can also increase utilization of existing kitchens, potentially improving restaurant economics during periods when dining rooms are less busy.

Other revenue expanded even faster, rising 119.7% to $13.4 million. Super Hi cited growing demand for hot pot condiments, Haidilao-branded food products and products associated with newer sub-brands being developed through its Pomegranate Plan.

The Pomegranate Plan is strategically important because it allows Super Hi to test restaurant concepts beyond traditional Haidilao hot pot. Successful secondary brands could broaden the company’s addressable market, attract customers seeking different price points or cuisines and reduce dependence on one flagship concept.

Together, delivery and other activities generated $21 million during Q2, up from $9.8 million a year earlier. Those businesses therefore accounted for more than half of the dollar increase in consolidated revenue, showing how quickly Super Hi’s growth mix is shifting beyond the dining-room business.

Diversification also comes with execution risk. Delivery economics depend heavily on platform fees, promotions and packaging costs, while packaged foods introduce inventory, retail-distribution and consumer-product challenges that differ from restaurant operations.

The opportunity is compelling if Super Hi can leverage a recognized brand across several channels without building entirely separate customer-acquisition systems. Continued triple-digit growth in these categories would make them progressively more important to group revenue and could help smooth the volatility of individual restaurant markets.

Foreign-exchange losses turn stronger operations into a reported quarterly net loss

Super Hi reported a $1.9 million loss for Q2 compared with a $16.4 million profit a year earlier, despite the substantial improvement in operating income. The reversal was primarily attributable to a $20.6 million increase in net foreign-exchange losses caused by movements in local currencies against the U.S. dollar.

Currency exposure is structurally significant because Super Hi operates restaurants across Southeast Asia, East Asia, North America, Australia, the United Kingdom and the United Arab Emirates while reporting consolidated financial results in U.S. dollars. Changes in exchange rates can therefore create large accounting effects even when underlying restaurants are performing better.

This makes operating income and operating margin particularly useful when evaluating the quarter. Those measures exclude unrealized foreign-exchange differences and therefore provide a cleaner view of how the restaurant network itself performed before currency movements affected consolidated earnings.

Cash generation also remained positive. Net cash from operating activities reached $28.2 million during Q2 compared with $26.6 million a year earlier, showing that the reported net loss did not correspond with a deterioration in underlying cash generation.

Super Hi ended the quarter with approximately $147.7 million of cash and cash equivalents after excluding time deposits with original maturities longer than three months. Total bank balances and cash were about $266.4 million, giving the company meaningful liquidity to support restaurant expansion and newer business lines.

The foreign-exchange loss can therefore be viewed as an important risk rather than direct evidence that the restaurant turnaround has failed. Persistent currency weakness could continue distorting reported earnings, but investors should separately track the operating economics of the underlying restaurant network.

Expansion is becoming more selective as management focuses on productivity before restaurant count

Super Hi ended June with 129 Haidilao restaurants compared with 126 a year earlier and 127 at the end of Q1. The relatively modest increase shows that the company is no longer pursuing expansion at the expense of restaurant economics and is instead emphasizing utilization, customer experience and operational efficiency.

The geographic mix also changed during the year. Southeast Asia declined to 73 restaurants from 74, while East Asia increased to 22 from 20 and North America rose to 22 from 20, reflecting selective additions rather than broad-based network expansion.

That strategy appears sensible given the varying economics across markets. East Asia is delivering very strong table turnover, while North America commands high spending per guest but currently has weaker same-store utilization, meaning the optimal pace of expansion differs considerably by region.

Management’s current operating approach emphasizes employee development, customer experience and restaurant management under its “Dual Focus on Employees and Customers” strategy. The Q2 improvement in staff-cost efficiency and operating margin provides the clearest evidence yet that those initiatives may be producing financial benefits rather than simply increasing expense.

The next stage will require stronger same-store revenue growth. Table turnover is improving and guest visits are rising, but consolidated same-store sales remained slightly below the prior-year level, meaning Super Hi still needs better monetization of customer traffic to create a more powerful restaurant growth engine.

If that improves while delivery and branded products continue expanding at triple-digit rates, Super Hi could develop a more balanced revenue mix with higher utilization of its physical restaurant network and more ways to monetize the Haidilao brand.

Key takeaways from Super Hi’s Q2 margin expansion and overseas Haidilao growth

• Q2 revenue increased 10% to $218.8 million as higher restaurant traffic and rapidly expanding delivery and branded-product businesses supported growth.
• Operating income surged 118.9% to $8.1 million, while operating margin nearly doubled to 3.7% as revenue grew faster than several major operating expenses.
• Guest visits rose 5.2% to more than 8.1 million, while average table turnover improved to 3.9 times per day from 3.8.
• Same-store table turnover increased to 4.0 times per day, showing improving restaurant utilization even though aggregate same-store revenue remained slightly lower year over year.
• Staff costs fell to 34.3% of revenue from 35.3%, providing evidence that management’s restaurant optimization strategy is improving labor productivity.
• Delivery revenue jumped 105.4% to $7.6 million, giving Super Hi a faster-growing channel that can monetize existing kitchens outside traditional dine-in traffic.
• Other revenue rose 119.7% to $13.4 million as packaged foods and secondary restaurant concepts expanded, reducing dependence on the core Haidilao dining business.
• A $20.6 million increase in foreign-exchange losses pushed Super Hi to a $1.9 million net loss despite stronger operating performance, making currency exposure the quarter’s main financial distortion.
• Operating cash flow remained positive at $28.2 million, reinforcing that the statutory loss did not reflect a comparable deterioration in underlying cash generation.
• HDL shares traded around $14.10, up roughly 1%, as investors balanced improving restaurant economics against foreign-exchange volatility and still-soft same-store revenue.