Chinese tea chain Chagee has managed to lift its revenues once more, but the continued expansion of its store network is starting to eat into its profits.

Now boasting 7531 teahouses across Greater China and beyond, Chagee ended its first fiscal quarter of the year with RMB3.54 billion (US$514.1 million), compared to RMB3.39 billion in the same quarter one year earlier. These increasing revenues, however, didn’t counter a 33.9 per cent decline in profits across the same period.

Franchised teahouses continue to make up the bulk of the Chagee business, accounting for 77.4 per cent of total revenues; company-owned teahouses made up the remainder.

While the Greater China locations account for 95 per cent of Chagee’s portfolio, by the end of the quarter, the business had a presence in seven other countries, with the most recent market entries being in the US, Vietnam, and the Philippines.

“In 2026, we’re dedicating all our efforts to operations, focusing on executing every detail that truly matters to our consumers,” founder and CEO Zhang Junjie told investors.

“We believe that the ability of the company to navigate cycles ultimately depends on genuine consumer recognition. Therefore, our goal this year is very clear: To perfect every single consumer touch point.

“Chagee is entering a mature, stable, and sustainable phase of high-quality growth. We’re confident in every step we take forward towards the future.”