What did Chagee Holdings (NASDAQ:CHA) report in Q1 2026 earnings?

Chagee Holdings reported first-quarter revenue of RMB3,546 million ($514.1 million), up 4.5% year over year. GAAP net income fell 33.9% to RMB447.7 million ($64.9 million), while non-GAAP net income, adjusting for $5 million in share-based compensation, was RMB506.7 million ($73.5 million), down 25.2%.

Why did Chagee Holdings’ (NASDAQ:CHA) net income decline despite revenue growth?

Net income fell due to a sharp contraction in operating margins. Higher operational costs, promotional spending, and intense competition in the premium beverage sector squeezed profitability, offsetting gains from increased revenue and international expansion.

How did Chagee Holdings (NASDAQ:CHA) perform in its international markets?

Overseas markets delivered strong growth, with GMV rising 139% year over year to RMB426.4 million. International expansion partially offset the decline in the domestic Greater China market, contributing meaningfully to overall revenue growth.

What happened to Chagee Holdings’ (NASDAQ:CHA) domestic market performance?

GMV in Greater China fell to RMB7,491.4 million from RMB8,048.4 million in Q1 2025, reflecting slower consumer spending amid broader economic headwinds and softer discretionary retail demand.

How did operating income and margins change for Chagee Holdings (NASDAQ:CHA)?

Operating income dropped to RMB547.2 million ($79.3 million) from RMB820.8 million a year ago. The decline illustrates margin pressure from higher promotional costs, competitive pricing, and scaling expenses as the company expanded its retail network.

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Chagee revenue rises on global expansion while Q1 profits slump 34%

Written by Jon CuthbertPublished May. 29 2026Last Updated May. 29 2026

Chagee Holdings (NASDAQ:CHA) reported a rise in first-quarter revenue as aggressive international expansion partially offset cooling demand in its home market, though a sharp contraction in operating margins drove net income down by more than a third.

For the three months ended March 31, 2026, the premium freshly-made tea drinks provider generated net revenues of RMB3,546 million ($514.1 million), representing a 4.5% increase from the RMB3,392.7 million reported in the prior-year period.

However, GAAP net income plunged 33.9% to RMB447.7 million ($64.9 million), down from RMB677.3 million a year earlier.

Non-GAAP net income, which adjusts for RMB5 million in share-based compensation expenses, landed at RMB506.7 million ($73.5 million), down 25.2% year-over-year.

Profitability faced significant pressure at the operational level, where first-quarter operating income fell to RMB547.2 million ($79.3 million) compared to RMB820.8 million in the first quarter of 2025.

The margin squeeze highlights an increasingly promotional and competitive landscape across the premium beverage sector in Greater China, which forced the company to absorb higher operational costs even as it scaled its infrastructure.

Despite the bottom-line headwinds, Chagee maintained a rapid physical rollout.

The company expanded its global retail presence to 7,531 teahouses at the end of the quarter, a 12.7% increase compared to the footprint recorded at the same point last year.

Brand engagement also showed resilient near-term momentum, with the company’s active member base growing 11.7% sequentially from the fourth quarter of 2025 to reach 50 million users.

The quarter’s underlying metrics revealed a distinct geographic divide in consumer spending.

Total gross merchandise value (GMV) across the network reached RMB7,917.8 million, heavily bolstered by a 139% year-over-year surge in overseas markets, which contributed RMB426.4 million to the total.

Conversely, GMV within Chagee’s core Greater China market fell to RMB7,491.4 million from RMB8,048.4 million in the first quarter of 2025, illustrating the broader economic headwinds dampening domestic discretionary retail expenditures.