Atour Lifestyle - Q2 2024
August 29, 2024
Transcript
Operator (participant)
Ladies and gentlemen, thank you for standing by, and welcome to the Atour Lifestyle Holdings Second Quarter 2024 Earnings Conference Call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. Today's conference is being recorded. At this time, I would like to turn the conference over to Ms. Alison Zhang, Director of Investor Relations. Please go ahead, ma'am.
Alison Zhang (Director of Investor Relations)
Thank you, operator. Good morning, and good evening, everyone. Welcome to our second quarter 2024 earnings conference call. Today, you will hear from our Founder, Chairman, and CEO, Mr. Wang Haijun, and our Co-CFO, Mr. Wu Jianfeng. Before we continue, please be aware that today's discussion will include forward-looking statements under federal securities laws. These statements are subject to various risks and uncertainties, and actual results may differ significantly from what is stated or implied in our comments today. The company is not obligated to update any forward-looking statements, except as required by applicable laws. Additionally, during this call, our management will discuss certain non-GAAP financial measures solely for comparison purposes. For a clear understanding of these measures and a reconciliation of GAAP to non-GAAP financial results, please refer to the earnings release issued earlier today.
Furthermore, a webcast replay of this conference call will be accessible on our website at ir.yaduo.com, where a copy of the results presentation is also available. Now, I will turn the call over to Mr. Wang, our CEO.
Haijun Wang (Founder, Chairman, and CEO)
[Foreign language]
Thank you, Alison. Hello, everyone, and thank you for joining Atour's second quarter 2024 earnings call today.
[Foreign language]
During the second quarter of 2024, domestic travel market demand remained steady, with leisure tourism extending its healthy upward trajectory alongside continuously evolving customer demand. By proactively adapting to these shifting market dynamics, we further strengthened our leadership in the upper mid-scale hotel market.
[Foreign language]
We consistently elevated the Chinese Experience in our accommodation business during the first half of the year to better address our customers' personalized, diverse, and quality-driven expectations. Meanwhile, we adeptly capitalized on emerging opportunities presented by the latest wave of retail business development. We made substantial headway in propelling holistic, high-quality growth across our business and brand portfolio, while continuously deepening our insight into customer needs and amplifying our brand reputation.
[Foreign language]
Now, I would like to provide more details on our performance for the second quarter of 2024.
[Foreign language]
Let's begin with our hotel business. Please turn to slide four of our second quarter 2024 results presentation. Our RevPAR reached RMB 359 in the second quarter of this year, representing 93.5% of its level in the same period of 2023. Notably, our OCC growth remained solid, reaching 101.7% of 2023's level for the same period, further underscoring Atour's resilient demand and strong brand influence. ADR was 92.8% of its level in the same period of 2023, largely due to last year's high comparison base effect.
[Foreign language]
Please turn to slide five. Our mature hotels in operation for more than 18 months continued to outpace group's overall performance during the second quarter. Excluding structural impact, such as the ramp-up of new hotels, same hotel RevPAR in the second quarter of 2024 reached a 96.2% of 2023's level for the same period, outperforming the group's blended performance by 2.7 percentage points. Specifically, OCC increased by 2.2 percentage points year-over-year, and ADR stood at 94.4% of the same period in 2023.
[Foreign language]
Please turn to slide six. Our synergistic development of Atour and Atour Light has unlocked the substantial growth potential for our group. In the second quarter, we maintained vigorous momentum in our hotel network expansion, with 123 new hotel openings, up 76% year-over-year, setting a record pace in new openings for a single quarter. As of the end of the second quarter, we had a total of 1,412 hotels in operation, representing a 37% year-over-year increase, accelerating our progress toward our goal of 2,000 premier hotels nationwide by 2025.
[Foreign language]
Please turn to slide seven. Franchisees' confidence remained strong and steadfast this quarter, bolstered by our robust brand influence and product competitiveness. We made significant strides in both the number and efficiency of our new signings. With a notable pipeline expansion, the number of hotels under development reached 712 as of the end of the second quarter, underpinned by a substantial number of high-quality projects, laying a solid foundation for Atour's sustained growth and nationwide expansion.
[Foreign language]
Next, let me share Atour and Atour Light's latest developments. Please turn to slide eight. On June 28th, to mark Atour's 11th anniversary, we proudly unveiled our first Atour 4.0 hotel in Xi'an, embodying Atour's commitment to its original aspirations. Atour 4.0 is inspired by Yaduo Village's natural beauty, transforming the hotel into a serene retreat amid the city's hustle and bustle. With extensive upgrades across various aspects of the hotel, including multifunctional workspaces, premium sleep settings in guest rooms, and upgraded dining services, Atour 4.0 adopts an experience-driven approach, aiming to create an enhanced operating model characterized by superior quality, greater pricing potential, and optimized efficiency.
[Foreign language]
During its first month of operation, Xi'an Nanmen Atour Hotel achieved an OCC surpassing 91% and a RevPAR exceeding RMB 710. This exceptional performance not only underscores the market's resounding endorsement of Atour 4.0 but also reaffirms Atour's leading position in the upper mid-scale hotel market. To date, we have signed 50 Atour 4.0 projects across more than 30 cities nationwide, with flagship projects in core business districts set to be launched successively. As a pioneering product reflecting our deep understanding of customer needs, we believe that Atour 4.0 will propel the upper mid-scale hotel market into a new stage of high-quality development.
[Foreign language]
Please turn to slides nine and 10 for a closer look at Atour Light. Since its launch, Atour Light 3.0, our mid-scale product, has garnered broad praise and recognition from customers and franchisees. We are confident of growing Atour Light 3.0 into our second 1,000 hotel brand. In the second quarter, a total of 37 new Atour Light 3.0 hotels were signed, accounting for more than 20% of our total new signings for the period. As of the end of the second quarter, we had a total of 54 Atour Light 3.0 hotels in operation. Among those Atour Light 3.0 hotels that have been in operation for more than three months, RevPAR exceeded RMB 310 in the second quarter, highlighting Atour Light's strong competitive edge in the mid-scale hotel segment.
[Foreign language]
Notably, with the opening of the Atour Light hotel in Liuliqiao, Beijing, in late May, Atour Light 3.0 has now established a comprehensive presence across all tier-one cities. In July, Liuliqiao Atour Light Hotel realized an outstanding operational performance, with OCC exceeding 90% and a RevPAR surpassing RMB 600, setting a new benchmark case for Atour Light 3.0 hotels.
[Foreign language]
Furthermore, as we expanded Atour Light's various service touchpoints to provide our customers with a superior service experience, we also crafted distinctive marketing campaigns for Atour Light to deepen customer awareness of the brand. In the second quarter, we partnered with renowned cultural IPs to launch a series of summer events at Atour Light 3.0 hotels, fostering stronger connections with customers and further enhancing Atour Light's brand visibility. As we explore and embrace a more vibrant and diversified Chinese Experience, we have observed a notable rise in the proportion of young and female customers at Atour Light hotels.
[Foreign language]
Moving now to our retail business. Please turn to slide 11. As our second growth driver, our retail business sustained its outstanding performance in the second quarter, with GMV up by 157.6% year-over-year to RMB 620 million, and sales from online channels accounting for over 90% of the total GMV.
[Foreign language]
Atour Planet excelled once again during this year's June 18th shopping festival, with total GMV reaching RMB 310 million, setting a new sales record for shopping festivals, and significantly outpacing other brands year-over-year sales growth across many major e-commerce platforms. Furthermore, our Deep Sleep Lightweight Comforter has garnered extensive acclaim since its release earlier this year, underscored by surging sales momentum during the June 18th shopping festival, with total sales exceeding 170,000 units, topping the sales charts in its category on Tmall, JD.com, and Douyin.
[Foreign language]
Please turn to slide 12. Atour Planet's impressive growth in the second quarter, despite market softness, stems from Atour's deep insight into and relentless pursuit of the Deep Sleep concept, coupled with an efficient new product development mechanism. This approach has successfully brought multiple blockbusters to market and consistently drives iterative product upgrades based on customer demands. Since the beginning of this year, Atour Planet has achieved significant breakthroughs across research and development, as well as new product launches in the comforter category. Following the Deep Sleep Lightweight Comforter's success, we introduced another groundbreaking product in July, the Deep Sleep Thermo-Regulating Comforter Pro.
[Foreign language]
This new product features our innovative dual-layer temperature control system, significantly enhancing its warmth and breathability. Crafted from cutting-edge fiber materials, the Thermo-Regulating Comforter outperforms silk in temperature and humidity variation tests, delivering superior temperature regulation and dryness. Additionally, it adopts our Deep Sleep Lightweight Comforter's highly praised coverless design, and is also machine washable and dryer friendly, ensuring a minimalist and authentic Deep Sleep experience that allows Deep Sleep to occur naturally.
[Foreign language]
Looking ahead, we will remain focused on customer needs as we further develop and enrich our Deep Sleep product offerings, enhancing and perfecting the Atour experience. Our goal is to bring Deep Sleep into more homes and immerse customers in Atour Planet touchpoints, fostering a deeper connection with the Atour brand.
[Foreign language]
Transitioning to our membership business, please turn to slide 13. Our consistent refinement of the membership program and the resulting rapid growth of our membership base have dynamically propelled Atour's development. As Atour's brand recognition flourishes and climbs, our membership base has rapidly expanded. As of the end of the second quarter, our registered individual members surpassed 76 million, marking a 72.5% increase year-over-year. Meanwhile, our CRS channel remained healthy, contributing 62.9% to the total room nights sold during the second quarter. The contribution of room nights sold to corporate members rose to 19.3% during the second quarter, up 0.9 percentage points from the same period last year, further solidifying Atour's leading position as the preferred brand for business travel.
[Foreign language]
Please turn to slide 14. We launched a series of distinctive events in the second quarter to further enhance membership benefits and experiences. For example, during the Labor Day holiday in May, we successfully hosted the Atour Lying-Down Festival in Nantong, catering to the new wave of tourism consumption, and precisely aligned with today's diverse leisure travel demand for comfortable and relaxing travel experiences. Furthermore, we continue to tap into new consumption drivers in the hospitality and the lodging industry, such as the Music Plus and the Sports Plus concepts, ensuring that every stay at Atour's is memorable and reinforces the distinctiveness of the Atour Experience.
[Foreign language]
Please turn to slide 15. Last but not least, I would like to highlight Atour's ESG progress. Following the release of our first ESG report earlier this year, Atour has deepened our commitment to sustainable development, extending our warm, caring efforts to a broader range of communities and natural environments. In June, we proudly launched the Yuan Meng Project in partnership with a nonprofit organization. This initiative helps to protect the critically endangered Skywalker hoolock gibbon, one of China's rarest and most valuable primate species.
[Foreign language]
The Gaoligong Mountains in Yunnan are one of the last remaining habitats for the Skywalker hoolock gibbon. As one of China's critically endangered species, fewer than two hundred of these gibbons remain in existence today. To raise awareness, we have created an exclusive, Atour branded image of the Skywalker hoolock gibbon, and are conducting educational campaigns as well as merchandise sales featuring this image, calling on the public to join us in safeguarding one of China's most endangered species. Moving forward, we remain committed to taking tangible steps to preserve biodiversity and protect endangered species.
[Foreign language]
Now, I'll turn the call over to our Co-CFO, Mr. Wu Jianfeng, to discuss our financial results.
Jianfeng Wu (Co-CFO)
Thank you, Haijun. Now, I would like to present the company's financial performance for the second quarter of 2024. Please turn to slide 17 for the result presentation. Our net revenue for the second quarter of 2024 grew by 64.5% year-over-year, and 22.4% quarter-over-quarter to RMB 1,797 million. The year-over-year increase was driven by robust growth in the managed hotel business and retail business. The quarter-over-quarter increase was mainly attributable to an increase in RevPAR, which reached RMB 359 for the second quarter of 2024, compared with RMB 328 for the previous quarter. Revenues from our manachised hotels for the second quarter of 2024 were RMB 1,027 million, up by 63.9% year-over-year and 22.8% quarter-over-quarter. The year-over-year increase was primarily fueled by our ongoing hotel network expansion and the rapid growth of our supply chain business.
The total number of manachised hotels increased to 1,382 as of June 30, 2024, up by 38.1% year-over-year. The quarter-over-quarter increase was mainly due to an increase in RevPAR. RevPAR of our manachised hotel was RMB 355 for the second quarter of 2024, compared with RMB 324 for the previous quarter. Revenue was contributed by our leased hotel for the second quarter of 2024, were RMB 180 million, reflecting 17.9% year-over-year decline, but about 7.3% quarter-over-quarter increase. The year-over-year decline was primarily due to a decrease in the number of these hotels as a result of our product mix optimization, as well as a decrease in RevPAR. The quarter-over-quarter increase was driven by an increase in RevPAR. Our leased hotel RevPAR was RMB 503 for the second quarter of 2024, compared with RMB 455 for the previous quarter.
Revenues from our retail business for the second quarter of 2024 were RMB 537 million, marking a significant increase of 153.6% year-over-year, and 28.8% quarter-over-quarter. These increases were driven by widespread recognition of our retail brands and effective product innovation and development, as we successfully broadened our range of product offerings. In the second quarter of 2024, comforters sales accounted for over 20% of retail revenues, further accelerating the growth of our retail business. Revenues from others for the second quarter of 2024 were RMB 53 million, up 51.2% year-over-year, and 11.5% quarter-over-quarter, driven by our fast-growing membership business. Now let's move to costs and expenses. Please turn to slide 18.
Operating costs and expenses for the second quarter of 2024 totaled RMB 1,400 million, including RMB 24 million share-based compensation expenses, compared with RMB 816 million, including RMB 10 million share-based compensation expenses, for the same period of 2023. Hotel operating costs for the second quarter of 2024 increased by 52.3% year-over-year, and 17.2% quarter-over-quarter to RMB 776 million. These increases were primarily due to the increase in variable costs, such as supply chain costs associated with our ongoing hotel network expansion. The gross margin of our hotel business was 35.7% for the same quarter of 2024, compared with 39.8% for the same period of 2023, due to an increase in RevPAR, which is billable to a high base effect in the same period of 2023, as well as an increased share of revenue generated by the lower margin supply chain business.
Retail costs for the second quarter of 2024 rose by 146.4% year-over-year, and 28.6% quarter-over-quarter to RMB 265 million. These increases was associated with the rapid growth of our retail business. The gross margin of our retail business was 50.6% for the second quarter of 2024, compared with 49.2% for the same period of 2023, driven by an increasing contribution from higher margin online sales. Now, please turn to slide 19. Selling and marketing expenses for the second quarter of 2024 were RMB 225 million, compared with RMB 94 million for the same period of 2023. This increase was mainly due to our enhanced investment in brand recognition and the effective development of online channel, aligned with the growth of our retail business.
Selling and marketing expenses accounted for 12.5% of the revenue, of net revenues for the second quarter of 2024, compared with 8.6% for the same period of 2023. General and administrative expenses for the second quarter of 2024 were RMB 91 million, including RMB 50 million share-based compensation expenses, compared with RMB 73 million, including RMB 9 million share-based compensation expenses for the same period of 2023. Excluding share-based compensation expenses, the increase was primarily due to an increase in labor cost. General and administrative expenses, excluding share-based compensation expenses, accounted for 4.2% of net revenues for the second quarter of 2024, compared with 5.9% for the same period of 2023. Technology and development expenses for the second quarter of 2024 were RMB 33 million, compared with RMB 18 million for the same period of 2023.
This increase was mainly due to increased investment in technology systems and infrastructure to support our expanding hotel network and retail business, and to improve customer experience. Technology and development expenses accounted for 1.8% of net revenues for the second quarter of 2024, compared with 1.6% for the same period of 2023. Now, please turn to slide 20. Adjusted net income for the second quarter of 2024 was RMB 328 million, representing a 31.6% increase year-over-year. The adjusted net profit margin for the second quarter of 2024 was 18.2%, representing a decrease of 4.6 percentage points year-over-year. Adjusted EBITDA for the second quarter of 2024 was RMB 443 million, up by 28.6% year-over-year, with an adjusted EBITDA margin of 24.6%, which decreased 6.9 percentage points year-over-year.
The decreases in both margins were primarily due to a decline in RevPAR and an increased revenue attribute, contribution from lower margin supply chain business, along with organic growth in selling and marketing expenses amid our retail business expansion. Please turn to slide 21 and 22. Operating cash inflow for the second quarter of 2024 was RMB 577 million. Investment cash outflow for the second quarter of 2024 was RMB 306 million. There were no cash flows from financing activities for the second quarter of 2024. We also maintained a healthy cash position with a stable growth momentum. As of June 30, 2024, our cash and cash equivalents totaled RMB 3,323 million, with net cash of approximately RMB 3,231 million. Please turn to slide 23.
For the full year of 2024, we currently expect the company's total net revenue to increase by 48%-52% compared with full year 2023. Please turn to slide 24. As part of the company's ongoing efforts to enhance shareholder value, today, we also announced a three-year annual dividend policy. Under the annual dividend policy, we plan to declare and distribute dividends with an aggregate amount of no less than 50% of net income for the preceding financial year in each of the three financial years commencing this year. In accordance with the annual dividend policy, today, we declared a cash dividend of $0.15 per ordinary share, or $0.45 per ADS. The aggregate amount of the cash dividend to be distributed will be approximately $62 million. That concludes our financial highlights for the second quarter of 2024. Now, let's open for Q&A.
Operator (participant)
Thank you. We will now begin the question and answer session. To ask a question, please press star one one on your telephone and wait for your name to be announced. For the benefit of all participants on today's call, if you raise your questions in Chinese, please immediately repeat your questions in English. Please limit your questions to one at a time. If you wish to have a follow-up question, please rejoin the queue. One moment for the first question. Our first question comes from the line of Dan Qi from Morgan Stanley. Please go ahead.
Dan Qi (Executive Director and Senior Equity Analyst)
[Foreign language] Please allow me to translate my question. This is Dan from Morgan Stanley. First of all, congratulations on the new quarterly record on hotel new openings. I have two related questions on hotel opening and signing. We saw signing progress trended very well in Q2, but Mr. Wang also mentioned about RevPAR year-on-year decline due to high base. Will this change in RevPAR affect the signing progress in second half this year compared to the number of signing in the first half this year? My second question is, given the strong opening so far, year to date, will the company change the full year opening target of 360 hotels? That's all for my question. Thank you.
Haijun Wang (Founder, Chairman, and CEO)
[Foreign language]
Thank you, Dan. Well, first, we have seen some quite nice progress in both new openings and the new signings overall this year. And in that second quarter, we maintained a very positive trend in hotel network expansion with 123 new hotel openings. which also once again broke our quarterly record. Due to this acceleration of openings in the first half of the year, we are now confident that this full year's new openings target will increase from 360-400.
[Foreign language]
As for new signings, due to our continuously strengthening brand influence and product competitiveness in the upper mid-scale and mid-scale markets, it's fair to see that, we have franchisees having very great confidence and being strongly willing to join our Atour system. We have now more than seven hundred hotels under development by the end of the second quarter. Meanwhile, we have also applied more stringent requirements on projects quality this year, because we aim to achieve quantity growth with quality. Franchisees also recognize that. They recognize our leading operating performance and the long-term investment return of our brand across the markets, and we will maintain that momentum to have a healthy and solid signings pace in quarter three.
[Foreign language]
Besides, we believe that now in China, with the increasing chain rate of upper mid-scale and mid-scale hotel market, also that we see the customers are having increasing demand for higher quality products and better accommodation experiences. We do have enough capabilities to leverage our Atour and Atour Light brands to differentiate ourselves and exert our brand influence to bring some impact to the hotel market, and there is enough room for our future growth of both Atour and Atour Light.
[Foreign language]
Thank you.
Operator (participant)
Thank you, Dan. Next question, please. One moment for the next question. Next question comes from the line of Xing Chen from UBS. Please go ahead.
Xing Chen (Investment Banking Analyst)
[Foreign language] Let me translate. I'm Chen Xing from UBS. Thank the management for giving this chance to ask questions. And the first question is that, may you share with us the company's RevPAR performances since July, and, does the company have, guidance for the full year 2024 RevPAR? The second question is that, considering the changes in the group's revenue structure, may you give us some color on the full year margin outlook? Thanks.
Haijun Wang (Founder, Chairman, and CEO)
[Foreign language]
Thank you, Chen Xing, and let me try to answer your questions.
[Foreign language]
In quarter three last year, with the full recovery of domestic tourism, we saw the number of tourists embarked on their summer trips significantly exceeded 2019's level. This year, our performance in the tourism market actually showed some resilience. However, we still do expect that a high base effect due to the summer peak season last year will still exist in this year's July and August performance.
[Foreign language]
Looking on the whole year, we do notice that there are still some uncertainties remain for RevPAR. But at Atour, we are quite confident of our performance, especially after removing the impact of new hotels ramping up, we can see that the same hotel RevPAR for mature hotels in operation for more than eighteen months, their performance is expected to outperform the group's blended performance by about two percentage points, which is maintained at a relatively stable position.
[Foreign language]
As for our revenue guidance, despite some volatility in RevPAR, we do expect the Group's 2024 revenue to maintain a faster growth. Like we previously mentioned, we would like to raise our 2024 full year revenue growth guidance from 40% as we estimated in the last quarter, to 48%-52% year-over-year, maintaining our industry-leading growth rate, driven by our continued expansion of hotel network and a rapid development of our retail business.
[Foreign language]
As for profit, considering the fluctuation of RevPAR this year, and like you have mentioned, our revenue structure change and continuous optimization of our cost structure, our adjusted net profit margin is expected to remain at about 18% for the whole year.
[Foreign language]
Thank you.
Alison Zhang (Director of Investor Relations)
Thank you, Xing. Next question.
Operator (participant)
Thank you for the questions. One moment for the next question. Next question comes on the line of Sijie Lin from CICC. Please go ahead.
Sijie Lin (Analyst)
[Foreign language] So, congratulations for another strong quarter, and very happy to see that we achieved a continuous breakthrough in product upgrade. Could you please share with us the opening guidance of Atour 4.0 this year? And how would this contribute to RevPAR increase? And, regarding our upscale brands, we mentioned before, we are doing some brand upgrades, so how's the progress? Thank you.
Haijun Wang (Founder, Chairman, and CEO)
[Foreign language]
Thank you, Sijie, for your question. With the grand opening of our first Atour 4.0 hotel, our upper mid-scale hotel market has entered a new stage of high quality development as we see it. Now there are 50 Atour 4.0 hotels in our pipeline. The benchmark projects in various core business areas will be introduced to the market gradually, and it is expected that 8-10 Atour 4.0 hotels will be opened within this year.
[Foreign language]
For the first batch of Atour 4.0 projects, we are having a higher standards and requirements on those projects, for example, such as on-site selection and property conditions. We have strict screening because we aim to create a batch of benchmark Atour 4.0 hotel projects to better demonstrate our brand value and market competitiveness.
[Foreign language]
Like we previously said, during its first month of operation, our first Atour 4.0 hotel achieved a RevPAR exceeding RMB 710, and an OCC surpassing 91%. Its outstanding operating performance has far exceeded our product model expectation, and that further boosted our confidence in this product of Atour 4.0. We believe that with the scale of Atour 4.0 hotels gradually expand, those hotels will also make a positive contribution to the RevPAR of the whole group as a whole.
[Foreign language]
And you also mentioned in your question you want to know about our upscale brand. Well, our plan is to officially launch our next generation upscale brand within this year, hoping to continuously boosting the development of our brand with some new vitality.
[Foreign language]
Thank you.
Alison Zhang (Director of Investor Relations)
Thank you, Sijie. Next question, please.
Operator (participant)
Thank you for the question. Next question comes from Ronald Leung from Bank of America. Please go ahead.
Ronald Leung (VP and Equity Research Analyst)
[Foreign language] Congratulations to management for achieving very rapid expansion in the mid-scale market. Could you elaborate on the new opening target for Atour Light 3.0 this year? And also, could you share some color on the initiatives of Atour Light to connect with younger demographic and enhance brand recognition? Thank you very much.
Haijun Wang (Founder, Chairman, and CEO)
[Foreign language]
Thank you, Ronald. Since the launch of our Atour Light 3.0, it has been highly recognized in the market. In the second quarter this year, we had a total 37 new signings of Atour Light 3.0, and that accounted for more than 20% of our total new signings. As of the end of June, the number of Atour Light 3.0 hotels in operation had reached 54, and we expect that the number of new openings of Atour Light 3.0 hotels within this year will be around 70-80, and the number of Atour Light 3.0 hotels in operation could possibly reach 100 by the end of this year.
[Foreign language]
Based on our initiatives of the diversification and youngness of the Chinese experience, we now see a significant increase in the proportion of young consumers and female consumers, both of them for Atour Light. In the first half of this year, the proportion of under 30 years old consumers of Atour Light increased it to 30%, and nearly, that was nearly five percentage points higher than 2023. The proportion of female consumers was also close to 50%.
[Foreign language]
To build upon our ethos of life at ease, we've been consistently introducing and refining the distinctive services at Atour Light hotels, such as we expanded co-branded collaborations with renowned cultural IPs. We better address the needs of young business travelers to deepen their awareness of our brand, Atour Light, and to continue to grow our membership and our consumer base.
[Foreign language]
Thank you.
Alison Zhang (Director of Investor Relations)
Thank you, Ronald. Next question, please.
Operator (participant)
Thank you for the questions. One moment for the next question. Next question comes from the line of Liu Jiwei from CITIC. Please go ahead.
Jiwei Liu (Analyst)
[Foreign language] I translate my question. I'm Jiwei from CITIC. I saw company announced the dividend plan for the next three years, roughly calculating the dividend payout ratio is about 60% of the last year net profit. So what's the guidance on the dividend payout ratio for the next two years? Also, I want to know if the company will consider other shareholder return plans, such as share repurchases. Thanks.
Haijun Wang (Founder, Chairman, and CEO)
[Foreign language]
Thank you, Jiwei, for your question. We have always been evaluating and implementing sustained returns for our shareholders. Based on our confidence in the company's future long-term development, and upon careful consideration of our profit distribution, we have declared the distribute dividends with an aggregate amount of no less than 50% of its net income for the preceding financial year in each of the announced the three financial years commencing this year. However, as our company is still now in a rapid growth phase, we will maintain some flexibility in capital utilization while ensuring business development. The specific dividend amounts will be comprehensively evaluated based on the company's actual and projected results of operations, financials, and cash positions, capital requirements, and as well as other factors.
[Foreign language]
In addition to cash dividends, we will continue to explore and actively consider other feasible ways to share the benefits of our growth with our shareholders. Thank you.
Alison Zhang (Director of Investor Relations)
Thank you, Jiwei. Next question, please.
Operator (participant)
One moment for the next question. Next question comes from Lydia Ling from Citi. Please go ahead.
Lydia Ling (Director of Equity Research)
[Foreign language] Thanks, management. I have a question regarding the retail business, which we saw still have very solid momentum in the second quarter. So can management share like what's the growth driver behind this very solid growth? And also, could you share your latest retail revenue guidance for the retail business? And also, like, what kind of the new products you're planning on the pipeline and also the OP margin for the retail business. Thank you.
Haijun Wang (Founder, Chairman, and CEO)
[Foreign language]
Thank you, Lydia. Atour Planet focuses on Deep Sleep scenarios, and we addresses consumer needs for improving their sleep quality. We are not only paying attention to the innovation of design and the materials during our new products R&D, but we also pay special attention to the iterative upgrading of products to ensure that Atour Planet products can timely capture the needs of consumers and whatever the market is changing towards, and so that we can continue to provide better sleep experiences to them.
[Foreign language]
And as you ask about any new products, we previously mentioned that we recently had the official launch of our Deep Sleep Thermo-Regulating Comforter Pro. And that product is a groundbreaking addition to our Atour Planet Deep Sleep series, and it had, for another time, reinforced our commitment to product development driven by user needs. And as for retail revenue, our second quarter retail revenue reached RMB 537 million, a year-over-year increase of above 150%. This not only maintained well because, that it's above the growth rate of the industry, but it also even led to the overall growth of the relevant categories on those e-commerce platforms. And based upon this strong performance in the first half of the year, we believe our retail revenue for the full year of 2024 is expected to double year-over-year.
[Foreign language]
As for retail OP margin, you can see that, with our products, gross margin being improved and because of our product structure and our channel structure being optimized, and in the second quarter, the gross margin was maintained at 51%, and expenses are being well controlled. We do believe that the retail OP margin will be maintained within a double digit.
[Foreign language]
Thank you.
Operator (participant)
That concludes the question and answer session. I would like to turn the conference back over to Alison Zhang for any additional or closing comments.
Alison Zhang (Director of Investor Relations)
Thank you for joining us today. If you have any further questions, please feel free to contact us. We look forward to speaking with you again next quarter. Thank you and goodbye.
Operator (participant)
Ladies and gentlemen, that concludes today's conference call. Thank you for your participation. You may now disconnect.