Atour Lifestyle Q1 Earnings Miss Estimates, Revenues Surpass

Atour Lifestyle Holdings Limited ATAT reported first-quarter 2025 results, with earnings missing the Zacks Consensus Estimate and net revenues beating the same. The top line increased year over year, while the bottom line declined from the prior-year quarter’s figure.

For the quarter, the company reported solid performance, showcasing high-quality growth across its hotel and retail segments amid a volatile market environment. It opened 121 new hotels during the quarter, expanding its operational portfolio to 1,727 properties. To strengthen its position in the upper-midscale segment, Atour Lifestyle introduced Atour 3.6 and launched the latest version of its Atour Light brand, Atour Light 3.3, progressing toward its goal of reaching 1,000 Atour Light hotels. The retail business also gained significant traction, with the Atour Planet deep-sleep product line continuing to influence consumer perception and driving a 70.9% year-over-year increase in gross merchandise value.

Following the results, the company shares gained 8.9% during trading hours yesterday.

Atour Lifestyle’s Q1 in Detail

The company reported earnings per share (EPS) of 24 cents, missing the Zacks Consensus Estimate of 32 cents by 25%. In the prior-year quarter, ATAT recorded an adjusted EPS of 26 cents. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

Atour Lifestyle Holdings Limited Sponsored ADR Price, Consensus and EPS Surprise

Atour Lifestyle Holdings Limited Sponsored ADR price-consensus-eps-surprise-chart | Atour Lifestyle Holdings Limited Sponsored ADR Quote

Net revenues of $263 million topped the consensus mark of $259 million by 1.4%. The top line increased 6.5% year over year.

Revenues in the Manachised hotels segment increased 23.5% year over year to $142 million, with the total number of hotels increasing to 1,702 from 1,271 as of the fourth-quarter end.

The Leased hotels segmental revenues declined 23.5% year over year to $18 million. The downside can be attributed to the decrease in the number of leased hotels as a result of the company’s product mix optimization. At the end of the quarter, the number of hotels in this segment tumbled to 25 from 31.

Revenues from the Retail segment significantly grew 66.5% year over year to $96 million. The growth was fueled by effective product innovation and development.

The Others segment’s revenues during the quarter grew 7.9% to $7 million compared with last year's quarter.

Operating Highlights of ATAT

Total operating costs and expenses were $216 million, up from $160 million reported in the prior-year period. Hotel operating costs were $101 million compared with $92 million reported in the prior-year period. The rise was primarily due to higher variable costs.

Selling and marketing expenses in the first quarter were $39 million compared with $24 million reported in the prior-year period. The increase was primarily attributed to enhanced investment in brand recognition and effective development of online channels.

Adjusted EBITDA amounted to $65 million, up 33.8% year over year.

ATAT’s Financials

As of March 31, 2025, Atour Lifestyle’s cash and cash equivalents and restricted cash were $434 million compared with $496 million as of Dec. 31, 2024.

At the end of the first quarter, the total outstanding borrowings were $10 million, up from $8.5 million at 2024-end.

ATAT Unveils 2025 Outlook

The company expects 2025 net revenues to grow in the range of 25-30% year over year.

ATAT’s Zacks Rank & Key Picks

Atour Lifestyle currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the Zacks Consumer Discretionary sector are Fox Corporation FOX, Laureate Education, Inc. LAUR and Stride, Inc. LRN.
 
Fox currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.
 
The company has a trailing four-quarter earnings surprise of 30.9%, on average. The stock has gained 10.4% in the year-to-date period. The Zacks Consensus Estimate for Fox’s fiscal 2025 sales and EPS implies growth of 15.3% and 32.4%, respectively, from the year-ago levels.
 
Laureate Education presently carries a Zacks Rank #2 (Buy). The company has a trailing four-quarter earnings surprise of 56.1%, on average. The stock has moved up 19% in the year-to-date period.
 
The Zacks Consensus Estimate for Laureate’s 2025 sales and EPS indicates growth of 0.3% and 23.7%, respectively, from the year-ago period’s levels.
 
Stride presently carries a Zacks Rank #2. The company has a trailing four-quarter earnings surprise of 94.7%, on average. The stock has gained 48.5% in the year-to-date period.
 
The Zacks Consensus Estimate for Stride’s fiscal 2025 sales and EPS indicates an increase of 16.7% and 51.2%, respectively, from the year-ago levels.

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This article originally published on Zacks Investment Research (zacks.com).

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