XIABUXIABU issued a profit warning, expecting an annual net loss of approximately 390 million to 410 million yuan, an increase compared to the previous year

According to the announcement from XIABUXIABU (00520), the group expects its revenue for the year ending December 31, 2024, to be approximately RMB 4.8 billion, a decrease of about 20% compared to the revenue for the year ending December 31, 2023. The group anticipates a net loss of approximately RMB 390 million to RMB 410 million for the year ending December 31, 2024, compared to a net loss of approximately RMB 190 million for the year ending December 31, 2023. The net loss for the group for the year ending December 31, 2024, is primarily due to intense competition in the dining market, continued weak consumer spending, and downgrading, which led to a year-on-year decline in revenue for the group's subsidiary brands. The mid-to-high-end brand Coucou is still operating at a loss; and the closure of some restaurants and ongoing losses have resulted in closure and impairment losses totaling approximately RMB 260 million. The group has always adhered to a prudent management approach, maintaining a healthy cash flow level through scientific allocation of operating capital to ensure ample financial reserves. In response to changes in the market environment, the group has established a dynamic monitoring mechanism to implement refined management of restaurant operations while continuously optimizing the cost structure and enhancing customer experience. This includes focusing on targeting specific customer groups, continuously improving product competitiveness and brand value, and implementing a "four modernization" strategy of diversifying product offerings, optimizing meal sets, humanizing member experiences, and refining operations. The supply chain leverages collective procurement advantages, timely grasping the low points of bulk raw material procurement prices, and collaborating with suppliers for mutual benefit to significantly reduce average procurement prices. By utilizing new logistics centers and implementing standardized receiving processes, the group reduces delivery times and enhances delivery efficiency while implementing performance management for drivers and optimizing routes to significantly lower delivery costs. Furthermore, the group is developing and expanding delivery products to enhance synergy with dine-in services, focusing on increasing member attraction and consumer stickiness, such as offering free tea drinks to members and providing benefits to consumers, as well as closing inefficient restaurants and concentrating resources on expanding small-sized restaurant models