Key Takeaways:
Atour reported 38.4% revenue growth in the third quarter, and raised its full-year guidance to 35% from a previous forecast of 25% growth
The hotel operator's revpar continued to decline in the third quarter, but it said the situation should improve after a strong performance during the weeklong Oct. 1 holiday
The year 2025 could well go down as the "Year of the Pillow" for Atour Lifestyle Holdings Ltd. (NASDAQ:ATAT).
In its third-quarter financial results, announced last week, the upscale hotel operator said it expects to report 35% revenue growth this year, marking a strong upgrade from the 25% rise it forecast at the start of the year. The main engine behind that growth is the company's retail business, which allows customers to buy products they see in their rooms through Atour's online store. That business has done especially well, led by strong performance for its bedding products, including pillows.
Investors were broadly encouraged by the company's latest report, sending Atour's stock up 8.5% in the five trading days last week after the announcement. Analysts also quite like the company, with all 19 who follow the stock rating it either a "buy" or "strong buy", a relative rarity these days due to uncertainty surrounding China's economic slowdown.
Atour wasn't immune to that slowdown, recording another quarter of declines for revenue per available room, or revpar, the most widely watched industry metric that combines room prices with occupancy rates. Atour and most of its peers saw their revpar start contracting last year, after recording strong gains in 2023 fueled by a wave of post-pandemic "revenge travel."
In a slightly encouraging sign, Atour's rate of revpar declines has been moderating through the year, and fell by a relatively small 2.4% year-on-year in the third quarter to 371 ...
