Super Hi International (HDL) Q3 2025: Table Turnover Climbs to 4.5 as New Brands Ramp, Margin Rebounds QoQ

2025-11-26 | By EarningsIQ Research

Super Hi International’s Q3 showed operational progress, with table turnover and customer traffic rising, but profit margins remained pressured by discounting and foreign exchange losses. New international brands gained traction, and management emphasized a bottom-up, quality-first expansion strategy, balancing near-term profitability with long-term brand building. Looking ahead, the company’s focus on local execution, employee retention, and gradual technology adoption will shape its margin recovery and global growth trajectory.

Summary

• Operational Leverage Emerges: Table turnover and customer traffic improved, supporting higher daily restaurant revenue per location.
• Brand Diversification Accelerates: New concepts like Malatang and BBQ in overseas markets are gaining scale and profitability.
• Margin Recovery Hinges on Execution: Management’s steady expansion and efficiency focus set the stage for future profitability improvement.

Performance Analysis

Super Hi International delivered Q3 revenue growth of 7.8% year-over-year, driven by increased customer traffic and higher table turnover rates, particularly in East Asia and North America. The core Haidilao restaurant business contributed the lion’s share of revenue, while new store openings and higher adoption of fresh-cut menu items lifted per-table consumption. Takeaway revenue also surged, reflecting the company’s effort to diversify sales channels and adapt to evolving consumer habits.

However, profitability remained under pressure as operating profit margin declined to 5.9%, down 1.6 percentage points from the prior year, reflecting the impact of customer discounts, brand marketing investments, and higher rental costs from expanded leased properties. Net profit fell sharply due to foreign exchange losses, highlighting the sensitivity of overseas operations to currency volatility. Despite these headwinds, quarter-over-quarter operating profit and margin rebounded significantly, signaling improved cost control and some benefit from management’s ongoing efficiency initiatives.

• Traffic and Turnover Gains: Table turnover increased to 3.9 overall and 4.5 at same stores, with East Asia leading at 4.9.
• Takeaway and Other Revenue Expansion: Takeaway revenue jumped 69.2% year-over-year, while other business lines grew 74.5%.
• Cost Structure Remains Tight: Employee costs and rent as a percentage of revenue rose modestly, with the largest expense increases tied to brand building and new store ramp-up.

Average order value declined due to strategic pricing adjustments, but higher guest counts per table offset this, resulting in increased daily revenue per restaurant. Regional differences persisted, with East Asia outperforming and new stores in the UAE and other regions still ramping up.

Executive Commentary

Strategic Positioning

1. Regional Tailoring and Expansion Discipline

Management is doubling down on a bottom-up, region-specific approach to store expansion, prioritizing quality over speed. Each market—East Asia, North America, Southeast Asia—has its own operational focus, with local managers empowered to tailor concepts and offerings to customer preferences. The company continues to open new locations selectively, with 10 new Haidilao restaurants opened year-to-date and nearly 20 more in the pipeline, but remains cautious about overextension, especially in slower-to-ramp markets like the US and Europe.

2. Brand Diversification and Scenario Innovation

Super Hi’s Pomegranate Plan, its multi-brand strategy, is gaining traction overseas. The Malatang brand in Canada quickly reached store-level profitability, while new BBQ and Izakaya concepts in Indonesia and Japan are ramping steadily. The company is leveraging shared sourcing and operational synergies where possible, but recognizes that different brands require distinct management and innovation. Nightclub-style renovations and fresh-cut menu scenarios are also driving incremental late-night traffic and higher per-table spend in select markets.

3. Employee and Customer-Centric Model

Employee retention and customer satisfaction remain central to the operating model, with the company reporting a rare one percentage point drop in employee turnover. Incentive and profit-sharing schemes are credited with boosting morale and operational quality, though management acknowledges that direct links between incentives and financial metrics are difficult to quantify. The focus is on long-term relationship building with both customers and staff, believing this will translate into sustained profitability over time.

4. Technology and Operational Efficiency

Gradual adoption of information technology and AI is underway, with the goal of supporting middle-office management and easing the burden on frontline teams. This is expected to facilitate more scalable expansion, particularly for new brands, and improve overall organizational efficiency as the business grows more complex.

Key Considerations

This quarter’s results highlight Super Hi International’s balancing act between growth, operational discipline, and long-term brand development. The company’s willingness to accept short-term margin pressure in favor of customer loyalty and employee retention reflects a strategic patience uncommon in the sector.

Key Considerations:

• Brand Incubation Pace: New concepts are contributing to growth, but require careful management and measured rollout to avoid dilution of operational focus.
• Localization Drives Performance: High localization rates in Asia (above 90%) contrast with lower rates in North America (40% to 50%), affecting both cost structure and customer engagement.
• Supply Chain Pragmatism: No large-scale supply chain investments are planned; instead, the company favors localized procurement and small R&D labs to support menu innovation.
• Discounting and Value Perception: Menu pricing and portion adjustments have lowered average order value, but are intended to drive traffic and repeat business, with margin recovery expected as efficiency improves.

Risks

Foreign exchange volatility poses a significant earnings risk, as evidenced by this quarter’s swing from gains to losses. Intensifying competition, especially in new international markets, and the complexity of multi-brand management could strain resources and erode margins if not tightly controlled. The company’s strategy of prioritizing long-term relationships over short-term profit may test investor patience if margin recovery lags.

Forward Outlook

For Q4, Super Hi International expects:

• Higher table turnover and revenue as the hotpot peak season drives increased gatherings and traffic.
• Continued improvement in store-level profitability, particularly for newer concepts as they ramp.

For full-year 2025, management did not provide specific guidance but reiterated:

• Ongoing focus on quality-driven expansion, operational improvement, and cautious brand rollout.

Management highlighted several factors that will influence results:

• Seasonal strength in Q4 typically lifts margins above the year-to-date average.
• No plans for heavy capital outlays; emphasis remains on optimizing existing assets and gradual technology adoption.

Takeaways

Investors should track the company’s ability to convert operational improvements into sustained margin recovery and profitable new brand growth.

• Margin Inflection Watch: Quarter-over-quarter margin rebound demonstrates operational leverage, but year-over-year declines highlight ongoing pressure from discounting and investment.
• Brand Diversification Progress: Early profitability at Malatang and steady ramp at new concepts suggest the Pomegranate Plan can drive incremental growth, provided operational discipline holds.
• Execution and FX Sensitivity: Foreign exchange volatility and regional execution gaps remain the key swing factors for near-term earnings and sentiment.

Conclusion

Super Hi International’s Q3 2025 results reflect a company in transition, balancing expansion and brand innovation with pragmatic cost management and a long-term view on customer and employee loyalty. The next phase will test whether operational gains and new concepts can deliver durable margin improvement as the business scales globally.

Industry Read-Through

Super Hi’s results underscore the importance of regional adaptation, employee-centric incentives, and scenario-based innovation for global restaurant operators. The company’s experience with foreign exchange headwinds and the measured rollout of new brands provide a blueprint for international chains navigating similar challenges. Competitors should note the operational leverage available from improved table turnover and the risks of aggressive expansion without local management depth. The emphasis on technology-enabled management and localized supply chains may become increasingly critical as the sector evolves.

HDL Consumer Discretionary Restaurants International Expansion Brand Diversification Operational Efficiency Employee Retention