GreenTree Hospitality Group Ltd. Reports Fourth Quarter and Fiscal Year 2024 Financial Results

SHANGHAI, April 24, 2025 /PRNewswire/ -- GreenTree Hospitality Group Ltd. (NYSE: GHG) (“GreenTree”, the “Company”, “we”, “us” and “our”), a leading hospitality and restaurant management group in China, today announced its unaudited financial results for the fourth quarter and fiscal year of 2024. As Da Niang Dumplings and Bellagio, two leading restaurant chain businesses in China, were all under the control of GreenTree Inns Hotel Management Group, Inc., until their acquisition by the Company, the acquisition was accounted for a common-control acquisition in a manner similar to the pooling -of-interests method. The consolidated balance sheets and consolidated statements of comprehensive income/(loss) include the results of each of the combining entities or businesses from the earliest date presented or since the date when the combining entities or businesses first came under common control. In this report, the comparative financial data have been restated to reflect the business combinations under common control.

Fourth Quarter of 2024 Operational Highlights

Hotels

Restaurants

Our performance in the fourth quarter was negatively impacted by the closure of 12 leased and managed hotels during the year, lower RevPar compared to a high base last year, and the continued optimization of our restaurant business.

In our hotel business we are simultaneously accelerating the opening of new hotels, with a planned 480 in 2025, and upgrading our existing portfolio with an absolute focus on quality to ensure higher standards of products and services. We believe that the rejuvenation of our portfolio that was slowed down by the pandemic will be completed by the Summer of 2026. While Midscale remains our core segment, hotel openings in 2024 and our pipeline highlight our strategic commitment to expanding our Mid-to-upscale segment where we expect growth over the next two years to deliver significant economies of scale. Finally, we will continue the phased closure of leased and managed hotels, retaining only select flagship properties in key cities to serve as showcases of our capabilities for prospective franchisees.

The strategic transformation of our restaurant business made further progress on our two priorities. At the end of the quarter, franchised and managed stores accounted for almost 90% of all stores up from 78% a year ago , and street stores that benefit from more stable consumer traffic accounted for 50% of all stores, up from 40% a year ago. Additionally, we have been rightsizing many of our stores, reflecting the new economic reality, to improve overall profitability. We believe we now have a strong foundation to build on and will grow the overall number of restaurants in 2025 with a particular focus on franchised and managed as well as street stores.

2024 Financial Results

Total revenues were RMB304.5 million (US$41.7 million)^[1]，a 18.2% year-over-year decrease.

Hotel revenues were RMB240.2 million (US$32.9 million)^[1], a 17.1% year-over-year decrease. The decrease was mainly attributable to a 9.8% decrease in F&M hotels’ Revpar and the closure of 12 L&O hotels in 2024 while revenues a year ago benefited from a one-time revenue recognition of requisitioned rooms during COVID and a one-time revenue recognition due to a successful lawsuit against sublease.

Restaurant revenues were RMB65.1 million (US$8.9 million)^[1], a 25.8% year-over-year decrease. The decrease was mainly due to the closure of L&O stores, and a 16.8% decrease in ADS.

Total revenues for the year were RMB1,343.4 million (US$184.1 million)^[1], a 17.4% year-over-year decrease.

Total revenues from leased-and-operated, or L&O, hotels and restaurants were RMB119.3 million (US$16.3 million)^[1], a 31.7% year-over-year decrease.

Total revenues from L&O hotels were RMB91.0 million (US$12.5 million)^[1], a 27.5% year-over-year decrease. The decrease was mainly attributable to the closure of 12 L&O hotels in 2024 while revenues a year ago benefited from a one-time revenue recognition of requisitioned rooms during COVID and a one-time revenue recognition due to a successful lawsuit against sublease. Same L&O hotel revenues in the fourth quarter of 2024 decreased by 2.4% year over year.

Total revenues from L&O restaurants were RMB28.5 million (US$3.9 million)^[1], a 40.8 % year-over-year decrease. The decrease was mainly due to the closure of 24 L&O stores during the year and offset by 47.1% increase in ADS. Same L&O store revenues in the fourth quarter of 2024 decreased by 3.1% year over year.

Total revenues from L&O hotels and restaurants for the year were RMB596.6 million (US$81.7 million)^[1], a 24.3% year-over-year decrease.

Total revenues from franchised-and-managed, or F&M, hotels and restaurants were RMB152.9 million (US$21.0 million)^[1], a 7.1% year-over-year decrease.

Total revenues from F&M hotels were RMB148.2 million (US$20.3 million)^[1], a 9.0% year-over-year decrease, mainly due to a 9.8% decrease in F&M hotels’ Revpar.

Total revenues from F&M restaurants were RMB4.8 million (US$0.7 million)^[1], a 182.0% year-over-year increase. The increase was mainly due to the opening of 39 F&M restaurants during the year.

Total revenues from F&M hotels and restaurants for the year were RMB635.4 million (US$87.0 million)^[1], a 9.9% year-over-year decrease.

Total revenues from wholesale and others were RMB32.3 million (US$4.4 million)^[1], a 1.6% year-over-year decrease. Total revenues from wholesale and others for the year were RMB111.4 million (US$15.3 million)^[1], a 17.0% year-over-year decrease.

Total operating costs and expenses

Operating costs were RMB199.0 million (US$ 27.3 million)^[1], a 6.0% year-over-year decrease.

Operating costs of the hotel business were RMB139.9 million (US$19.2million)^[1], a 9.5% year-over-year decrease. The decrease was mainly attributable to the closure of 12 L&O stores in 2024, which resulted in lower rental, consumable, food and beverage, and staff related costs.

Operating costs of the restaurant business were RMB59.9million (US$8.2 million)^[1], a 10.5% year-over-year decrease. The decrease was mainly due to the closure of 24 L&O stores.

For the year, operating costs were RMB822.6 million (US$112.7 million)^[1], representing an 13.2% decrease.

Selling and marketing expenses were RMB17.6 million (US$2.4 million)^[1], a 58.9% year-over-year increase.

Selling and marketing expenses of the hotel business were RMB13.5 million (US$1.8 million)^[1], a 61.7% year-over-year increase.

Selling and marketing expenses of the restaurant business were RMB4.1 million (US$0.6 million)^[1]..

For the year, selling and marketing expenses were RMB67.6 million (US$9.3 million)^[1], a 5.6% decrease.

General and administrative, or G&A expenses were RMB43.0 million (US$5.9 million)^[1], a 25.8% year-over-year decrease.

G&A expenses of the hotel business were RMB39.7 million (US$5.4 million)^[1], a 20.1% year-over-year decrease. The decrease was mainly due to lower consulting fees, lower bad debts from accounts receivables, and lower G&A staff related expenses.

G&A expenses of the restaurant business were RMB3.3 million (US$0.5 million)^[1], a 60.0 % year-over-year decrease. The decrease was mainly due to lower staff related expenses.

For the year, G&A expenses were RMB182.6 million (US$25.0 million)^[1], a 12.4% year-over-year decrease.

Impairment loss of goodwill were RMB81.0million (US$11.1 million)^[1], These expenses were impairment of goodwill related to the restaurant business.

Other general expenses were RMB69.1million (US$9.5 million)^[1], a 32.1% year-over-year increase. These expenses include impairment of trademarks related to the restaurant business, impairment of assets, and provisions for franchisee loans receivables related to franchisee loans.

Gross profit was RMB105.5 million (US$14.5 million)^[1], a year-over-year decrease of 34.3%. Gross margin was 34.7%, compared to 43.1% a year ago. The gross profit of the hotel business was RMB100.3 million (US$13.7 million)^[1], an 25.8% year-over-year decrease. The gross profit of the restaurant business was RMB5.2 million (US$0.7 million)^[1], a 75.0% year-over-year decrease. Gross profit for the year was RMB520.9 million (US$71.4 million)^[1], a 23.4% year-over-year decrease.

Income from operations was RMB-95.0 million (US$-13.0 million)^[1],compared to income from operations of RMB46.9million in the fourth quarter of 2023, with a margin of -31.2%. Excluding impairment loss of goodwill and other general expenses, income from operations was RMB55.1 million(US$7.6million) with a margin of 18.1%.

Income from operations of the hotel business was RMB26.1 million (US$3.6 million)^[1], compared to an income from operations of RMB47.4 million in the fourth quarter of 2023, with a margin of10.9%. Excluding other general expenses, income from operations of the hotel business was RMB56.1 million (US$7.7 million), a decrease of 32.9%, with a margin of 23.4%.

Loss from operations of the restaurant business was RMB121.1 million (US$16.6 million)^[1], compared to loss from operations of RMB5.1 million in the fourth quarter of 2023, with a margin of -186.1%. Excluding impairment loss of goodwill and other general expenses, loss from operations of the restaurant business was RMB1.0 million(US$0.1million) with a margin of -1.5%.

Income from operations for the year was RMB161.9 million (US$22.2 million)^[1] compared to income from operations of RMB335.6 million in 2023, with a margin of 12.1%.

Net income was RMB-72.8million (US$-10.0 million)^[1], compared to a net income of RMB8.6 million in the fourth quarter of 2023, and net margin was -23.9%. Excluding impairment loss of goodwill and other general expenses, adjusted net income increased 26.8% year over year to RMB77.3 million(US$10.6 million)^[1] with a margin of 25.4%.

Net income of the hotel business was RMB28.4 million (US$3.9 million)^[1], compared to a net income of RMB8.1 million in the fourth quarter of 2023, and net margin was 11.8%. Excluding other general expenses, adjusted net income of the hotel business increased 31.7% to RMB58.4 million (US$8.0 million)^[1] with a margin of 24.3%.

Net loss of the restaurant business was RMB101.2million (US$13.9million)^[1], compared to a net loss of RMB2.9million in the fourth quarter of 2023, and net margin was -155.5%. Excluding the impairment of trademarks and goodwill, adjusted net income of the restaurant business was RMB18.9 million(US$2.6 million)^[1] with a margin of 29.1%.

Net income for the year was RMB107.3 million (US$14.7 million)^[1] compared to net income of RMB260.5 million in 2023, with a margin of 8.0%. Excluding the impairment of goodwill due to the restaurant business and other general expenses, adjusted net income decreased 20.9% to RMB269.2 million with a margin of 20.0%.

Adjusted EBITDA (non-GAAP)^[2] was RMB71.5 million (US$9.8 million)^[1], a year-over-year decrease of 38.3%. Adjusted EBITDA margin, defined as adjusted EBITDA (non-GAAP) as a percentage of total revenues, was 23.5%, compared to 31.1% a year ago. Adjusted EBITDA (non-GAAP) for the year was RMB386.5 million (US$52.9 million)¹, a year-over-year decrease of 25.2%.

Core net income (non-GAAP) was RMB57.8million (US$7.9 million)^[1], a year-over-year decrease of 22.3%. The core net margin, defined as core net income (non-GAAP) as a percentage of total revenues, was 19.0%, compared to 20.0% one year ago. Core net income (non-GAAP) for the year was RMB277.6 million (US$38.0 million)¹, a year-over-year decrease of 13.3%.

Earnings per American Depositary Share, or ADS, (basic and diluted) were RMB-0.70(US$-0.10 )^[1], down from RMB0.12 one year ago. Core net income per ADS (basic and diluted) (non-GAAP) was RMB0.57 (US$0.08 )^[1], down from RMB0.73 a year ago.

Earnings per ADS (basic and diluted) for the hotel business were RMB 0.29 (US$0.04)^[1], increaed from RMB 0.10 one year ago. Core net income per ADS (basic and diluted) (non-GAAP) for the hotel business were RMB0.45 (US$0.06)^[1].

Earnings per ADS (basic and diluted) for the year of 2024 was RMB1.08 (US$0.15 )^[1] down from RMB2.64 one year ago. Core net income per ADS (basic and diluted) (non-GAAP) was RMB2.73 (US$0.37 )^[1] for the year, a decrease from RMB3.14 a year ago.

Cash flow Operating cash inflow was RMB 74.2 million (US$10.2 million)^[1] as a result of income from operations. Investing cash outflow for the fourth quarter 2024 was RMB 25.2million (US$3.5million)^[1], which was primarily attributable to investment of property and purchases of equipment, and was partially offset by proceeds from disposal of equity securities. Financing cash outflow was RMB 70.4 million (US$9.7 million)^[1], mainly attributable to dividends distributed to the shareholders.

Cash and cash equivalents, restricted cash, short-term investments, investments in equity securities and time deposits. As of December 31, 2024, the Company had total cash and cash equivalents, restricted cash, short term investments, investments in equity securities and time deposits of RMB 1,839.1 million (US$252.0 million)^[1], compared to RMB1,883.9million as of September 30, 2024. The decrease was primarily due to dividends distributed to the shareholders and investment of property, partially offset by cash from operating activities.

Guidance

Taking into account the recovery in long-term trends and short-term industry fluctuations, we expect the decline of total revenues of our organic hotel business for the full year of 2025 to be flat compared to their 2024 levels.

The guidance set forth above reflects the Company’s current and preliminary views based on its recovery and may not be indicative of the final financial results for any future periods or the full year.

Conference Call

GreenTree’s management will hold an earnings conference call at 8:00 AM U.S. Eastern Time on April 24, 2025, (8:00 PM Beijing/Hong Kong Time on April 24, 2025).

Dial-in numbers for the live conference call are as follows:

Participants should ask to join the GreenTree call, please dial in approximately 10 minutes before the scheduled time of the call.

A telephone replay of the conference call will be available after the conclusion of the live conference call until May 1, 2025.

Dial-in numbers for the replay are as follows:

Additionally, a live and archived webcast of this conference call will be available at http://ir.998.com.

Use of Non-GAAP Financial Measures

We believe that Adjusted EBITDA and core net income, as we present them, are useful financial metrics to assess our operating and financial performance before the impact of investing and financing transactions, income taxes and certain non-core and non-recurring items in our financial statements.

The presentation of Adjusted EBITDA and core net income should not be construed as an indication that our future results will be unaffected by other charges and gains we consider to be outside the ordinary course of our business.

The use of Adjusted EBITDA and core net income has certain limitations because it does not reflect all items of income and expenses that affect our operations. Items excluded from Adjusted EBITDA and core net income are significant components in understanding and assessing our operating and financial performance. Depreciation and amortization expense for various long-term assets, income tax and share-based compensation have been and will be incurred and are not reflected in the presentation of Adjusted EBITDA. Each of these items should also be considered in the overall evaluation of our results. Additionally, Adjusted EBITDA and core net income do not consider capital expenditures and other investing activities and should not be considered as a measure of our liquidity. We compensate for these limitations by providing the relevant disclosure of our depreciation and amortization, interest expense/income, gains/losses from investments in equity securities, income tax expenses, share-based compensation, share of loss in equity investees, government subsidies and other relevant items both in our reconciliations to the corresponding U.S. GAAP financial measures and in our consolidated financial statements, all of which should be considered when evaluating our performance.

The terms Adjusted EBITDA and core net income are not defined under U.S. GAAP, and Adjusted EBITDA and core net income are not measures of net income, operating income, operating performance or liquidity presented in accordance with U.S. GAAP. When assessing our operating and financial performance, you should not consider this data in isolation or as a substitute for our net income, operating income or any other operating performance measure that is calculated in accordance with U.S. GAAP. In addition, our Adjusted EBITDA and core net income may not be comparable to Adjusted EBITDA and core net income or similarly titled measures utilized by other companies since such other companies may not calculate Adjusted EBITDA and core net income in the same manner as we do.

Reconciliations of the Company’s non-GAAP financial measures, including Adjusted EBITDA and core net income, to the consolidated statement of operations information are included at the end of this press release.

About GreenTree Hospitality Group Ltd.

GreenTree Hospitality Group Ltd. (“GreenTree” or the “Company”) (NYSE: GHG) is a leading hospitality and restaurant management group in China. As of December 31, 2024, GreenTree had a total number of 4,425 hotels and 182 restaurants. In 2023, HOTELS magazine ranked GreenTree 12th among the 225 largest global hotel groups in terms of number of hotels in its annual HOTELS’ 225. GreenTree was the fourth largest hospitality company in China in 2022 according to the China Hospitality Association. In 2023, GreenTree completed its acquisition of Da Niang Dumplings and Bellagio, two leading restaurant chain businesses in China.

GreenTree has a broad portfolio of diverse brands spanning from the economy to mid-scale, up-scale and luxury segments of the hospitality industry mainly in China. Through its strong membership base, expansive booking network, superior system management with moderate charges, and fully supported by its operating departments including Decoration, Engineering, Purchasing, Operation, IT and Finance, GreenTree aims to keep closer relationships with all of its clients and partners by providing a diverse brand portfolio that features comfort, style and value.

For more information on GreenTree, please visit http://ir.998.com

Safe Harbor Statements

This press release contains forward-looking statements made under the “safe harbor” provisions of Section 21E of the Securities Exchange Act of 1934, as amended, and the U.S. Private Securities Litigation Reform Act of 1995. In some cases, these forward-looking statements can be identified by words or phrases such as “may,” “will,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,” “believe,” “potential,” “continue,” “is/are likely to,” “confident,” “future,” or other similar expressions. GreenTree may also make written or oral forward-looking statements in its reports filed with or furnished to the U.S. Securities and Exchange Commission, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Any statements that are not historical facts, including statements about or based on GreenTree’s current beliefs, expectations, assumptions, estimates and projections about us and our industry, are forward-looking statements that involve known and unknown factors, risks and uncertainties that may cause our actual results, performance or achievements to be materially different from those expressed or implied by the forward-looking statements. Such factors and risks include, but not limited to the following: GreenTree’s goals and growth strategies; its future business development, financial condition and results of operations; trends in the hospitality industry in China and globally; competition in our industry; fluctuations in general economic and business conditions in China and other regions where we operate; the regulatory environment in which we and our franchisees operate; and assumptions underlying or related to any of the foregoing. You should not place undue reliance on these forward-looking statements. Further information regarding these and other risks, uncertainties or factors is included in the Company’s filings with the U.S. Securities and Exchange Commission. All information provided, including the forward-looking statements made, in this press release are current as of the date of the press release. Except as required by law, GreenTree undertakes no obligation to update any such information or forward-looking statements to reflect events or circumstances after the date on which the information is provided or statements are made, or to reflect the occurrence of unanticipated events.

Financial Tables and Operational Data Follow

GreenTree Hospitality Group Ltd.

Unaudited Condensed Consolidated Balance Sheets

GreenTree Hospitality Group Ltd.

Unaudited Condensed Consolidated Statements of Comprehensive Income

GreenTree Hospitality Group Ltd.

Unaudited Condensed Hotel Statements of Comprehensive Income

GreenTree Hospitality Group Ltd.

Unaudited Condensed Restaurant Statements of Comprehensive Income

GreenTree Hospitality Group Ltd. Unaudited Condensed Consolidated Statements

GreenTree Hospitality Group Ltd. Unaudited Condensed Consolidated Statements

GreenTree Hospitality Group Ltd.

Unaudited Condensed Consolidated Statements of Cash Flows