Following extensive store closures and operational adjustments, Yonghui Superstores Co.,Ltd. has presented its first interim profit report for this phase.
The company released its 2026 first-half performance forecast on the evening of July 14th. It anticipates achieving attributable net profit of 250 million yuan for the first six months, marking a significant improvement of 490 million yuan compared to the same period last year and signaling a return to profitability. Core attributable net profit, excluding non-recurring items, is expected to be around 30 million yuan, an increase of 830 million yuan year-on-year.
The profit recovery is primarily attributed to the gradual stabilization of operations at stores that have undergone remodeling. By the end of June, Yonghui had completed the revamp of 331 stores. Alongside the progress in supply chain reforms and an increased proportion of sales from its own-brand products, the company's overall gross profit margin rose by 1.6 percentage points in the first half compared to the previous year. Enhanced operational efficiency also led to a 1.8 percentage point reduction in the period expense ratio.
Concurrently, Yonghui has slowed the pace of store renovations this year, resulting in a notable decrease in one-time decoration costs, asset write-offs, and start-up expenses compared to the same period last year. Additionally, a rise in the share price of the US-listed company Advantage Solutions, in which Yonghui holds stock, contributed approximately 89 million yuan in fair value change gains.
However, the profit recovery in the first half was largely concentrated in the first quarter. For Q1 2026, Yonghui reported operating revenue of 13.367 billion yuan, a 23.53% year-on-year decrease. Attributable net profit was 287 million yuan, up 94.4%, while core attributable net profit reached 247 million yuan, an increase of 79.55%.
The revenue decline is mainly due to the reduction in store count, which dropped from 775 at the beginning of 2025 to 392 by the end of Q1 2026. However, revenue from remodeled stores grew by 16.57% year-on-year.
Based on these figures, it is estimated that Yonghui incurred an attributable net loss of approximately 37 million yuan in the second quarter, with a core attributable net loss of around 217 million yuan. This indicates that while the company achieved profitability on a half-year basis, the stability of earnings from its main business operations remains to be seen.
This year, Yonghui's market strategy has gradually shifted from large-scale "store remodeling" to focusing on product offerings and operational efficiency, aiming to enhance the operational quality of stores that have already been revamped.
In April, the company proposed creating "Ten Healthy Scenarios" across its national store network, covering categories such as healthy bakery items, low-sugar beverages, light meals, children's food, and local snacks. On June 13th, its first "Full Healthy Scenario Remodeled Store" opened in Chongqing. Sales over the first two days exceeded 3.06 million yuan, a 282% increase year-on-year, with cumulative foot traffic surpassing 40,000 visits, up 269%.
This store model is now being replicated in other regions. The Chengdu Pidu Times Longfor Store, which opened on July 10th, became the first full healthy scenario store launched by Yonghui in Chengdu.
Recently remodeled stores continue to attract high initial customer traffic. Yonghui disclosed that the Guangxi Liuzhou Chengzhong Wanda Store, opened on June 18th, achieved cumulative sales exceeding 17 million yuan and foot traffic over 200,000 visits within the first 13 days, with daily sales surpassing one million yuan for 11 consecutive days.
Challenges Beyond the Grand Opening
Nevertheless, high sales during the opening period do not fully indicate that a store has established a stable, profitable operation. Compared to the initial surge in customers, the more critical challenge for Yonghui in the next phase is whether product repurchase rates, inventory turnover, and cost control can be maintained after the initial excitement subsides.
Consequently, its own-brand strategy has become a focal point for the next steps. In July, Yonghui launched its second "717 Delicious Food Festival." Beyond promoting summer foods and event-related consumption, the company also plans a concentrated promotional push for its "Quality Yonghui" own-brand products in late July.
According to the company's current plan, it aims to launch approximately 200 own-brand products in 2026 and collaborate with core suppliers to incubate 100 products with annual sales exceeding 100 million yuan each over the next three years.
Compared to simply adjusting store layouts, adding services, or reducing SKUs, developing own-brand products and implementing direct procurement hold greater potential for establishing stable gross margins. However, these strategies also place greater demands on product selection, research and development, procurement scale, and food safety management.
Yonghui's transformation is evolving from imitating the store formats of competitors like Pang Donglai towards building its own product system. The success of Yonghui's remodeling efforts in the next stage will ultimately depend on whether the initial store popularity can be converted into sustained profitability.
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