Atour Lifestyle Holdings Q3 2026 Earnings Call Transcript

Atour Lifestyle Holdings (NASDAQ:ATAT) reported third-quarter financial results on Tuesday. The transcript from the company’s third-quarter earnings call has been provided below.

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Summary

Atour Lifestyle Holdings reported a 30.5% year-over-year increase in net revenues to RMB 3.4 billion for Q3 2026, driven by robust growth in both hotel and retail businesses.

The company opened 128 new hotels in the third quarter, reaching a total of 2,288 hotels, and maintains a pipeline of 778 hotels, indicating a steady expansion strategy.

Retail revenue grew by 61% year over year to RMB 1.4 billion, with standout sales in the Deep Sleep Memory Foam Pillow Pro series and other core product categories.

Atour’s hotel brands Atour 3.6, Atour Origin, and Atour Lite continue to demonstrate strong RevPAR performance, with plans for further brand expansion and a new upscale hotel brand launch.

The company declared a second cash dividend for 2026 and completed share repurchases, reflecting a shareholder return of over US$260 million, surpassing 2025 net income.

For 2026, Atour raised its retail revenue growth guidance to 50-55% and expects overall net revenue growth of 33-35% compared to 2025.

Management emphasized the importance of brand trust, quality experiences, and strategic product development in maintaining competitive advantages and capturing market demand.

Full Transcript

OPERATOR

Ladies and gentlemen, thank you for standing by and welcome to Atour Lifestyle Holdings Third Quarter 2026 Earnings Conference Call. At this time all participants are in listen-only mode. After the speaker’s presentation, there will be a question and answer session. Today’s conference is being recorded and I’d like to turn the conference over to Mr. Luc Hu, IR Director. Please go ahead, sir.

Luc Hu (Investor Relations Director)

Thank you, Operator. Good morning and good evening everyone. Welcome to our third 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. Under federal securities laws, 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 website at ir.yaduo.com where a copy of the results presentation is also available.

Now I will turn the call over to Mr. Wang, our CEO.

Haijun Wang (Chief Executive Officer)

Thank you, Luke. Hello everyone and thank you for joining Atour’s third quarter 2026 earnings call today. So far this year, we have continued to see structural diverging trends in China’s consumer market. It’s not just about how consumers allocate their budgets. It reflects a change in how they judge value. With more options than ever, consumers are making decisions more carefully. They rely more on real experiences and brand reputation. They also increasingly seek an emotional connection, choices that reflect who they are and a sense of being understood and valued.

With both reason and emotion shaping consumer choices, experiential value and brand trust are becoming the industry’s key differentiators. Even as the external environment and competitive landscape evolve, we remain guided by our strategy of Chinese experience brand-led excellence. We continue to strengthen our experience advantage and connect with users through our brands. Even in a divergent market, we continue to win users’ choice and trust. Now I would like to provide more details on our business performance for the third quarter of 2026.

Let’s begin with our hotel business. The third quarter coincided with the peak summer travel season. Despite temporary weather disruptions in some regions, leisure travel demand remained resilient. Overall, with travel activity concentrated in the peak season, as demand patterns shifted across regions and customer segments, we continued to draw on our differentiated products and experiences to support steady growth in our hotel business. In the third quarter, our RevPAR was 100.45% of the level in the same period of 2025, reflecting steady operating performance.

ADR was particularly resilient, further demonstrating the brand value we have built over the years. As for our hotel network, we continued to take a quality-first approach to expansion and grow at a steady pace. When choosing sites, we carefully consider their long-term growth potential and location advantages as we continue to open high-quality hotels. This targeted approach has allowed us to meet a wider range of accommodation needs. In the third quarter, we opened 128 new hotels, bringing our total to 2,288 hotels in operation as of the end of the third quarter.

We also maintain a healthy pipeline of 778 hotels at the same quarter end, providing a solid foundation for the continued growth of our hotel network. Turning to our booking channels, in the third quarter, our CRS channel continued to perform steadily, accounting for 61.5% of total room nights sold. Bookings under corporate agreements also made a stable contribution, accounting for 20.7% of total room nights sold. We will continue to improve member engagement and our services for corporate clients to make our own channels more competitive and provide our hotels with a more stable, diverse customer base.

Now, let me walk you through the latest developments across our hotel brands. Atour 3.6, the latest generation of Atour Hotel, now has more than 200 hotels in operation just over a year after the first one opened. Its product model has gradually been validated by the market, helping Atour 3.6 build a solid reputation and enter a phase of steady expansion with construction and operating costs that remain competitive over the long term. Atour 3.6 offers franchisees an investment option in the upper mid-scale hotel segment that balances returns and quality.

These advantages also enable more high-quality projects to generate sustainable commercial value. At the same time, its design combines practicality with contemporary aesthetics, helping it stand the test of time and giving the product a longer lifespan. In the third quarter, Atour 3.6 continued to deliver outstanding performance, with RevPAR of hotels in operation exceeding RMB 410, demonstrating its strong competitive position. Atour Origin has shown remarkable growth potential since it began operating as an independent brand. In the third quarter, RevPAR of Atour Origin hotels in operation exceeded RMB 520. We continue to refine Atour Origin’s signature experience touchpoint. We also recently partnered with an outdoor lifestyle brand to extend the natural tranquility of Atour Origin from hotel spaces into urban outdoor experiences. This allows guests to slow down and unwind whether at the hotel or out exploring the city.

Atour Origin’s distinctive brand identity has attracted new customer groups. Its strong pricing power is also supporting steady expansion, opening up greater opportunities for us in the upper mid-scale segment. The upper mid-scale segment has long been Atour’s core focus. It is also where we capture demand for quality accommodation with distinct positioning and product offerings. Atour Hotel and Atour Origin have rounded out our upper mid-scale brand portfolio.

Together they strengthen our core business and create new opportunities for growth. They also allow us to serve more diverse accommodation needs and offer franchisees more flexible investment options. We will continue to refine each brand’s distinct operating approach, further strengthening our dominant position in the upper mid-scale market. In the mid-scale market, hotel investors are placing greater emphasis on predictable returns. Atour Lite 3.3, the latest version of Atour Lite, balances investment efficiency with quality and through its experiential advantages opens up greater potential for a price premium. Its adaptability to different projects also provides more options for upgrading existing urban properties. For customers, Atour Lite 3.3 remains focused on its stay chill brand proposition and the aspects of their stay that matter most.

With its unique positioning and relaxed atmosphere, Atour Lite 3.3 has gradually built its distinct customer base, continuously bringing new customers to the group. In the third quarter, Atour Lite 3.3 continued to make breakthroughs in operating performance with RevPAR of hotels in operation exceeding RMB 360. In the third quarter, Atour Lite Series 3 also reached a milestone of 200 hotels in operation. As the network expands, an increasing number of guests are coming to appreciate Atour Lite’s distinctive positioning and product touch points through first-hand stays. Its brand strength has also grown steadily. The rollout of more benchmark projects has further validated Atour Lite’s operating model, which delivers stable returns and can be replicated at scale.

This highlights the brand’s long-term potential in the mid-scale market. As Atour Lite enters its next stage of development, we will remain committed to the premier hotels principle, keep strengthening our products and experiences, expand steadily in prime locations and firmly advance toward the goal of becoming a 1,000-hotel brand. In the upscale segment, Sahe continued to deliver outstanding performance, taking our brand portfolio further into higher value markets and opening up more opportunities for upscale expansion. For a long time, China’s upscale hotel market was dominated by international brands. However, their globally standardized operating models made it difficult for them to localize operations and respond promptly to personalized customer needs. Today, Chinese consumers are at the forefront of global demand trends, with increasingly high standards for product aesthetics, cultural expression and distinctive experiences.

We believe local brands still have significant room to grow in China’s upscale hotel market. Our experience in this market over the past few years has enabled us to more accurately capture and assess what customers in this segment need. I’m also pleased to share that we will soon unveil a new upscale hotel brand to complement our existing portfolio with distinctive brand positioning, product designs and experience features. We aim to serve a wider range of consumer scenarios and price points, helping bring Chinese upscale hotel brands to the world stage.

Moving on to our retail business. In the third quarter, Atour Planet sustained its strong growth momentum with retail revenue reaching RMB 1.36 billion, up 61% year over year. This performance reinforces our belief that brands with quality products and experiences can continue to win consumers overall. They can also create new consumer demand and market opportunities and find their own path to growth. Reinforcing our strength in core categories and making continued breakthroughs in strategic categories reflect more than an expanded product portfolio. These advances reflect our ongoing focus on creating value for users supported by the systematic capabilities we have built across product development, supply chain management, content creation and brand building. These capabilities support one another and work together. First, in product development, we start with how people actually sleep.

We identify the problem before looking for a technical solution. Our systematic approach to improving our blockbuster products has proven effective in the market. We also have a clearer sense of how to take each product category forward. Second, in supply chain management, we continue to expand our network of capable high-quality suppliers who can work with us over the long term. We rely on industry-leading manufacturing standards to ensure a high-quality product experience.

Alongside new product feature upgrades and continued quality improvements, we have also made significant progress this year in addressing the stock-out issues we faced in the past. Third, in content creation, we don’t overwhelm users with technical specifications or rely on gimmicks. Instead, we explain what our products do and how they work in simple, everyday terms that people can relate to. This helps us build emotional connections with users and reinforces their impression that Atour Planet truly understands them.

Fourth, in brand building, Atour Planet increasingly comes to mind when consumers think of natural deep sleep. Our consistent pricing discipline and product experience have also helped us gradually build one of our strongest assets: the trust of our users. In the third quarter we focused on the finer details of users’ sleep experience and the problems they encounter. Drawing on those insights, we rolled out a range of upgraded products in the sleep category, all of which showed strong sales momentum in our core categories. To date, cumulative sales of the Deep Sleep Memory Foam Pillow Pro series have exceeded 13 million units. Our latest generation, Deep Sleep Memory Foam Pillow Pro 4.0, surpassed RMB 100 million in sales just 17 days after launch, demonstrating how well the product resonated with users.

Our comforter category also performed strongly, with revenue up more than 70% year over year in the third quarter. The product lineup within the Deep Sleep Thermoregulating Comforter Pro 3.0 series has further validated the category’s growth momentum. In our strategic categories, Deep Sleep Loungewear 2.0 and Deep Sleep Fitted Sheet 2.0 also posted standout sales, giving Atour Lifestyle Holdings’ growth a further boost. We have always believed that the sleep market deserves our sustained focus. It offers stable long-term demand and significant market potential. Trust built on real experiences with a product is more likely to develop over time into lasting brand preference and customer loyalty. This builds greater brand value and helps the brand endure. That is why we remain confident in the long-term prospects of the sleep market. We also hope that Atour Lifestyle Holdings will become a sleep brand that more and more consumers trust and will help drive China’s sleep consumption market toward higher-quality development.

Turning to membership, we had more than 124 million registered individual members at the end of the third quarter. Members have long expected more than just a growing list of benefits. Distinctive benefits with tangible value are becoming increasingly important to the member experience. In the third quarter, we partnered with a retail ecosystem for the first time to launch a joint membership program, extending our member experience into more aspects of everyday life, including local shopping.

We hope to bring the sense of comfort and peace of mind that users find on their travels into more of their daily lives. Going forward, we will continue to put users’ real needs first. We will uphold our best price, best benefits and best room availability guarantees while offering differentiated benefits and services. By delivering an experience members can trust, we aim to strengthen member loyalty and attract more high value new customers. Guided by users’ desire for quality living, we will keep exploring more partnership opportunities across different aspects of everyday life.

At the same time, with Deep Sleep at the center, we will also continue to deepen the synergies between our hotel and retail businesses. Taking a long-term view ultimately brings us back to our people. For our users, as our brand and product portfolio continues to expand, more and more users are choosing Atour Lifestyle Holdings. Meeting their ever-changing needs and responding to their aspirations for a better life are always our most important long-term responsibility and the starting point and standard for all of our products and services. We will put our founding purpose into practice through sincere service and carefully crafted products so that users continue to feel at ease and cared for.

For our employees, we’re also taking steps to energize the organization, help them feel a sense of belonging and give them more opportunities to grow. As the world around us changes, we will also seize opportunities and embrace change to help our organization evolve. We will fundamentally rethink traditional approaches to organization and reshape how we manage the business, laying a solid foundation for the group’s long-term competitiveness. I will now turn the call over to our CFO, Mr. Jianfeng Wu, who will discuss our financial results.

Jianfeng Wu (Chief Financial Officer)

Thank you, Haijun. Hello everyone. I will walk through our financial performance for the third quarter of 2026. In the third quarter, our net revenues grew by 30.5% year over year to RMB 3.4 billion, supported by continued growth across our core businesses. Let me start with our hotel business. Revenues from our manachised hotels grew by 20.4% year over year to RMB 1.9 billion, mainly driven by the ongoing expansion of our hotel network and development of our supply chain business. Revenues from leased hotels decreased by 18.6% year over year to RMB 134 million, primarily due to a reduction in the number of leased hotels as a result of our product mix optimization. We had 17 leased hotels at the end of this September compared with 24 a year ago.

Together, our hotel businesses recorded a gross margin of 37.9%, up 0.6 percentage points year over year, benefiting from a more favorable mix as these hotels accounted for a smaller share of our hotel business. Turning to our retail business, our retail business continued to grow with revenues up 61% year over year to RMB 1.4 billion. This growth reflects the progress we have made in building our brand, expanding our product portfolio and strengthening our supply chain capabilities. Retail gross margin was 52.1%, slightly down 0.6 percentage points year over year, but up 0.7 percentage points quarter over quarter. These fluctuations were primarily driven by differences in product mix across quarters.

Overall, our retail gross margin has remained relatively low. Turning to overall profitability, adjusted net profit increased 26.2% year over year to RMB 615 million, while the adjusted net profit margin for the quarter was 17.9%, down by 0.7 percentage points year over year. This decline was primarily driven by a business mix shift led by the rapid growth of our retail business, together with the continued investment in talent and organizational capability to support long-term growth. Adjusted EBITDA increased 28.8% year over year to RMB 883 million, with the adjusted EBITDA margin coming in at 25.7%, down 0.4 percentage points year over year.

We maintained a healthy cash position. At the end of this quarter, cash and cash equivalents totaled RMB 2.7 billion with net cash of RMB 2.5 billion. In line with our annual dividend policy, we declared a second cash dividend for 2026 amounting to about US$69 million. This reflects our appreciation for shareholders’ support. For the full year, total dividend payments are expected to reach about US$142 million. Finally, turning to our full-year outlook for 2026, we currently expect total net revenues to increase by 33% to 35% compared with the full year of 2025. That concludes my remarks. Now let’s open for Q&A.

OPERATOR

Thank you. We will now begin the question and answer session. To ask a question now, please press star 11 on your telephone keypad and wait for your name to be announced. To withdraw your question, please press star 11 again. 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.

A moment for our first question, and our first question comes from the line of Lydia Ling from Citi. Please go ahead, Lydia. Your line is open.

Lydia Ling (Analyst)

Hi management, this is Lydia from Citi. Congratulations on the very strong results in the third quarter. So my question is on the shareholder return, and we saw that you actually announced the second dividend payment for this year. So could you share your overall long-term consideration regarding your shareholder return? Thank you.

Jianfeng Wu (Chief Financial Officer)

Thank you, Lydia. Let me answer this question. Shareholder returns have always been a very important part of our long-term capital allocation. As I just mentioned, the two dividends announced this year total about US$140 million. At the same time, we are advancing our share repurchase at a steady pace, and the cumulative repurchase amount so far this year has exceeded US$120 million. So as a result, taking the two together, cumulative shareholder returns this year have exceeded US$260 million, reaching more than 110% of our 2025 net income.

We remain confident in our long-term healthy development and our ability to continue generating cash flow going forward. We continue to target total shareholder returns of approximately 100% of the prior year’s net income through a combination of cash dividends and share repurchases, with execution adjusted dynamically based on market conditions. Thank you. Thank you, Lydia. Next question please.

OPERATOR

Thank you. And our next question comes from the line of Simon Zhong from Goldman Sachs. Please go ahead. Simon, your line is open.

Simon Zhong (Analyst)

Could you—I just have one small question in relation to the RevPAR performance for the fourth quarter as well as your outlook going into next year.

Haijun Wang (Chief Executive Officer)

Thank you, Simon. We maintained steady performance in Q3 despite diverging trends across the industry, and upon entering Q4 we continue to see diversified demand supporting the market. The combination of the National Day and Mid-Autumn holidays drove the release of long-distance travel demand and the leisure travel market performed well. Following the holidays, the resumption of business and MICE activities continues to support the business demand in the hotel market.

Looking ahead, segmented travel scenarios such as autumn break travel, inbound tourism and ice-and-snow tourism will also bring some structural incremental demand in Q4. As for the 2027 trend, we will not provide specific RevPAR guidance at this moment. However, we believe the domestic hotel industry still has a solid foundation for steady development. On the one hand, the overall industry supply growth is slowing down, creating more favorable conditions for further improvement in supply-demand dynamics. Likewise, demand will continue to show relatively strong resilience, and we are fully confident in the fundamentals of domestic demand for quality accommodation.

Thank you. Thank you, Simon. Next question please.

OPERATOR

Thank you. And our next question comes from the line of Ji Wei Liu from CITIC. Please go ahead. Ji Wei, your line is open.

Ji Wei Liu (Analyst)

Hi management, I’m Zhiwei from CITIC. The company’s hotel opening pace has varied from quarter to quarter this year. Will you adjust the full-year hotel opening target and how do you view hotel opening growth for 2027 and beyond? Thank you.

Haijun Wang (Chief Executive Officer)

Thank you, Jiwei. In Q3 we opened 128 new hotels. In terms of the pace, it was a little bit faster than in the first half of the year. Based on the current progress of projects under construction in our pipeline, we are maintaining our full-year target of approximately 480 new hotel openings. At the same time our target of approximately 80 hotel closures still stands. For 2027 and beyond, we are confident in a steady expansion of our hotel network. On one hand, we have ample pipeline reserves that provide good visibility and support for our hotel openings over the coming period. On the other hand, the differentiated product portfolio, consistent experience advantages and the enhanced ability to secure quality projects also provide more solid support for our hotel operations and long-term network expansion. Thank you.

OPERATOR

Thank you, Jiwei. Next question please. Thank you. And our next question comes from Ronald Leung from Bank of America. Please go ahead. Ronald, your line is open.

Ronald Leung (Analyst)

Thank you. Good evening, management. Could you share the recent signing trends? How does the company continue to maintain your ability to secure premier hotels? Thank you.

Haijun Wang (Chief Executive Officer)

Thank you. Ronald, let me continue answering this question of yours about signings. Against the backdrop of a more cautious industry trend, the franchisees now are considering project location, property conditions, partner brands and investment returns in a more comprehensive and rigorous manner when making their investment decisions. However, for franchisees at an equivalent investment scale, the hotel investment remains a quality business in the consumer sector with outstanding operational resilience and practically the strongest countercyclical attributes.

We are also committed to making our brands and products strong, stand the test of time and again, greater longevity so that hotel investment projects can continue to generate stable operating value and commercial returns through their entire life cycle. Of course, in a market characterized by competition for existing market share, the good projects are certainly scarce. But leading products and an increasingly diverse brand portfolio gave us stronger competitiveness and a greater initiative when securing quality projects. On the product side, it is not just about meeting functional needs through hardware, facilities and aesthetics. Now, the cultural depth and the differentiated experience embedded in the product themselves help the products achieve solid pricing power.

And on the brand side, over the past few years, we have already gradually built a richer, higher quality product matrix. New brands at different tiers such as Atour Lite, Atour Origin and Sahe have gradually matured. The synergy across our brands strengthens our collective competitive position within commercial districts and that enabled us to accommodate a wide range of property types. Thank you. Thank you, Ronald. Next question please.

OPERATOR

Thank you. And our next question comes from the line of Dan Chi from Morgan Stanley. Please ask your question. Dan, your line is open.

Dan Chi (Analyst)

My question is about the retail business. It continues to grow beyond our expectation. First and foremost, is there any update to full-year 2026 retail revenue 40% growth target, and from a longer-term perspective, CEO Mr. Wang shared the strategic directions from product development to brand and content. What are your views on longer-term growth trajectory or growth drivers? Thank you.

Haijun Wang (Chief Executive Officer)

All right, thank you Dan. Let me first talk about the long-term growth driving factor behind our products. Since the beginning of this year, the retail business has maintained very strong growth momentum. In our view, the value of the retail business goes far beyond the rapid growth just in this phase. What we have always hoped for is to run the retail business with a long-term approach to build up brand value and create a consumer brand that can consistently earn users’ trust and has that long-term vitality.

For the long-term development of Atour Planet our direction is also very clear. First we will continue to amplify our competitive advantages and this is how we define our competitive advantage that on one hand we continuously solidify our product strength with continuous insight into users’ real pain points, the presentation of products at Acme and continuously evolving innovation capabilities. On the other hand, we insist on not engaging in price wars or relying on discounts and promotions but instead through content we guide the users to gradually build a product selection mindset of sleep experience and accumulate long-term trust.

Also strengthen Atour Planet’s mind share in the sleep category and that has been how we’ve been following the market of the trends and also that’s based upon our own thinkings and of course facing shortcomings in the long-term development head on. We will also continue to build long-term capabilities and keep making breakthroughs while launching new products. We are also thinking about our long-term product pipeline, continuously building long-term R&D capabilities and also accumulating technology.

At the same time, we continue to bring in more high-quality suppliers and we work with them to strengthen our respective capabilities by building a stronger supply chain capability. We aim to provide better support for the continued innovation and upgrading of our product categories going forward. Let me update the guidance for the retail business based on our overall operating performance. We are now raising our guidance for 2026 retail business revenue growth to 50% to 55% year over year.

Moreover, over the past few years while the business scale has expanded, the operating profit margin of the retail business has also consistently maintained a trend of steady improvement in the long term. We aim for Atour Planet to deliver steady revenue growth while continuing to improve profit quality and operating efficiency, building a business that compounds value over time and consistently creates long-term brand value. Thank you.

OPERATOR

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

Luc 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.

OPERATOR

This concludes today’s conference call. Thank you for participating. You may now disconnect.

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.