Yonghui Superstores turned profitable in the first half of the year, but faced renewed pressure after excluding non-recurring items in the second quarter.

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After experiencing large-scale store closures and adjustments, Yonghui Superstores has delivered its first phase of profitability.

On the evening of July 14, Yonghui Superstores released its 2026 semi-annual performance forecast.

The company expects a net profit attributable to shareholders of 250 million yuan in the first half of the year, an increase of 490 million yuan over the same period last year, achieving a turnaround from loss to profit; net profit attributable to shareholders after deducting non-recurring items is about 30 million yuan, an increase of 830 million yuan over the same period last year.

The improvement in profit mainly comes from store adjustments gradually entering a stable operation stage.

As of the end of June, Yonghui had completed adjustments for a total of 331 stores. With the advancement of supply chain reforms and an increased proportion of sales from its own brand products, the company's overall gross profit margin in the first half of the year rose by 1.6 percentage points year-on-year; improved operating efficiency led to a 1.8 percentage point decrease in the expense ratio during the period.

At the same time, Yonghui has slowed down the pace of store renovations this year, and one-time renovation, asset write-offs, and opening expenses have decreased significantly compared to the same period last year.

The company’s holdings of Advantage Solutions, a US-listed company, also brought about 89 million yuan in fair value gains due to a rise in its stock price.

However, Yonghui's profitability recovery in the first half of the year was mainly concentrated in the first quarter.

In the first quarter of this year, Yonghui achieved operating income of 13.367 billion yuan, a year-on-year decrease of 23.53%; net profit attributable to shareholders was 287 million yuan, a year-on-year increase of 94.4%; net profit attributable to shareholders after deducting non-recurring items was 247 million yuan, a year-on-year increase of 79.55%.

The decline in revenue was mainly affected by the contraction in store scale. From the beginning of 2025 to the first quarter of this year, the number of stores dropped from 775 to 392, but adjusted stores’ revenue increased by 16.57% year-on-year.

Based on this calculation, Yonghui’s net profit attributable to shareholders in the second quarter was approximately a loss of 37 million yuan, and net profit attributable to shareholders after deducting non-recurring items was approximately a loss of 217 million yuan. This means that although the company achieved a turnaround on a half-year basis, the stability of profitability in its main business remains to be seen.

Since the beginning of this year, Yonghui's market actions have gradually shifted from large-scale "store adjustments" to building product and operational efficiency, aiming to improve the management quality of already adjusted stores.

In April, Yonghui proposed to create "Ten Major Health Scenarios" in its stores nationwide, covering categories such as healthy baking, low-sugar beverages, light meals, children’s food, and street snacks.

On June 13, its first "full health scenario adjusted store" opened in Chongqing. Sales in the two days after opening exceeded 3.06 million yuan, a year-on-year increase of 282%; cumulative customer flow exceeded 40,000, a year-on-year increase of 269%.

Afterward, this store model continued to be replicated in other regions. The Chengdu Pidu Times Longfor store, opened on July 10, became Yonghui’s first full health scenario store in Chengdu.

Recently, adjusted stores are still able to attract high customer flow at opening. Yonghui disclosed that the Liuzhou Chengzhong Wanda store in Guangxi, opened on June 18, achieved cumulative sales of over 17 million yuan and customer flow of over 200,000 within 13 days after opening, with daily sales exceeding 1 million yuan for 11 consecutive days.

However, high sales during the opening period do not necessarily mean the store has established a stable profit-making ability. Compared with the customer flow at the first store, Yonghui’s second phase challenge is to see if, after the initial hype fades, product repurchase, inventory turnover, and cost control can be maintained.

Own brands have therefore become the next key focus.

In July, Yonghui launched the second "717 Delicious Food Festival." In addition to summer foods and sports consumption, it also plans to focus on promoting its “Quality Yonghui” own brands in late July.

According to the company’s current plan, about 200 own brand products will be launched in 2026, and in the next three years, Yonghui will collaborate with core suppliers to incubate 100 products with sales over 100 million yuan each.

Compared to simply adjusting displays, increasing services, and reducing SKUs, own brands and direct sourcing are more likely to generate stable gross profits, but pose greater challenges for product selection, R&D, procurement scale, and food safety management.

Yonghui’s transformation is shifting from imitating Fat Donglai’s store format to establishing its own product system. However, in the next stage, whether Yonghui’s adjustments can be sustained still depends on whether store popularity can be converted into consistent profitability.

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