Super Hi (HDL) Q4 2025 earnings review
Accelerating Revenue Powered by New Ventures, Core Margins Suppressed
Super Hi finished FY25 with an accelerating 10.2% YoY revenue growth in Q4, reaching $230.0 million. However, the top-line success masks an ongoing, deliberate compression in profitability. Core restaurant operating margins dropped as the company channeled funds into employee incentives and customer value propositions. While Net Income flipped to a positive $4.5 million (from a $11.6 million loss last year), this was entirely driven by favorable foreign exchange swings rather than operational leverage. The real growth story has shifted to the 'Pomegranate Plan' (secondary brands) and the Delivery business, which are both growing at near 100% YoY rates and offsetting sluggish single-digit growth in traditional Haidilao restaurants.
🐂 Bull Case
Overall average table turnover rate increased to 4.0 times per day in Q4 (up from 3.9 last year). The strategy of rewarding customers with better experiences and fresh-cut options is successfully driving traffic, with total guest visits up 3.8%.
The company's revenue diversification is working perfectly. The Delivery business grew 94% YoY, and 'Other' business (condiments and new secondary brands) surged 109% YoY in Q4, establishing robust new pillars of growth.
🐻 Bear Case
Despite higher sales and turnover, Income from Operation fell 25% YoY to $13.0M in Q4. The operational margin contracted from 8.4% to 5.7%, demonstrating that current top-line growth is being heavily subsidized by shrinking profits.
The shift from a net loss to a net profit this quarter is an illusion of currency fluctuations. A $22.2M positive swing in foreign exchange masked the fact that actual operational profitability deteriorated significantly.
⚖️ Verdict: ⚪
Neutral. Management is executing exactly what they promised—sacrificing near-term margins to build a sustainable, diversified restaurant group. The explosive growth of secondary brands is a massive positive, but until core restaurant margins stabilize, the bottom line remains highly vulnerable.
Key Themes
Non-Core Segments Are Accelerating Growth Leaders
The standout operational success is the diversification away from purely relying on Haidilao hot pot dine-in. Delivery revenue growth accelerated to 94.3% YoY ($6.8M), driven by optimized local platform collaborations. Concurrently, 'Other Business' revenue accelerated to 109.3% YoY ($11.3M), fueled by the 'Pomegranate Plan' (incubation of new brands) and retail hot pot condiment sales. This diversification is crucial as the core brand matures.
Margin Degradation as a Strategic Choice
Management continues to trade margins for customer loyalty and employee retention. Income from operation margin dropped 2.7 percentage points YoY in Q4 to 5.7%. The full-year restaurant-level operating margin declined from 10.1% to 8.7%. The primary culprits are not inflation, but deliberate strategic choices: higher piece-rate wages for staff, investments in dining experiences, and costs associated with scaling secondary brands.
Core Haidilao Operations Lagging the Averages
While total company revenue grew a healthy 10.2% YoY in Q4, the traditional Haidilao restaurant segment grew only 6.0%. This segment still constitutes 92% of the business, meaning its sluggishness weighs heavily on the company. Total store count only increased by a net of 4 locations over the entire year (126 total), signaling that physical expansion of the core hot pot brand has dramatically slowed.
Steady Rebound in Table Turnover Metrics
Despite slowing unit expansion, Super Hi is effectively squeezing more efficiency out of its existing footprint. Q4 saw table turnover accelerate to 4.0 times per day, marking the highest rate of the year and up from 3.9 last year. Same-store turnover hit 4.1 times per day, proving that the margin sacrifices are indeed successfully driving foot traffic.
Other KPIs
Reversing. The Q4 net profit of $4.5 million was heavily subsidized by a massive $22.2 million decrease in net foreign exchange loss compared to the same period last year. Operationally, the company made less money YoY, but currency revaluations against the U.S. dollar painted a prettier picture on the final bottom line.
Accelerating slightly as a percentage of revenue, moving from 33.1% in FY24 to 33.6% in FY25. This was driven by intentional quality enhancements to food and the rollout of the 'Pomegranate Plan', reflecting a shift toward more material-intensive retail products.
Guidance
Management declined to provide numerical financial guidance. The textual guidance is stable, reiterating a focus on the 'Pomegranate Plan' to diversify revenue streams, expanding the overseas customer base, and absorbing near-term margin pressure to ensure long-term, sustainable global growth.
Key Questions
Margin Normalization Timeline
Restaurant-level margins have dropped from 10.1% to 8.7% this year due to employee incentives and customer benefits. Is this 8.5%-9.0% range the new structural normal, or do you anticipate leverage returning as turnover rates climb above 4.0x?
Core Brand Expansion Strategy
You only added a net of 4 Haidilao locations in 2025 while heavily accelerating secondary brands. Has the flagship Haidilao hot pot concept reached an international saturation point, or is this just a temporary pause to optimize existing stores?
Pomegranate Plan Unit Economics
Other business revenue jumped 109% in Q4. What are the store-level economics of these secondary brands compared to a traditional Haidilao, and what percentage of total revenue do you expect them to represent in 3 years?