Pagoda Swings to Profit in 2026 H1 as Store Network Rebounds

Pagoda released its financial results for the first half of 2026 on the evening of Aug. 28. According to the report, revenue from core operations came to approximately 5.01 billion Chinese yuan ($746.8 million), up 14.5% year on year. The company posted a net profit attributable to shareholders of about 34 million yuan ($5.07 million), versus a loss of 342 million yuan ($51.0 million) in the same period of last year. Both figures beat the company’s earlier guidance, which had called for revenue growth of at least 7% and net profit attributable to shareholders of at least 20 million yuan ($2.98 million).

Pagoda has faced significant operating pressure over the past two years. The company posted a net loss attributable to shareholders of about 386 million yuan ($57.5 million) in 2024, with operating pressure peaking in the first half of 2025. Pagoda proactively closed around 1,600 underperforming stores, bringing the total down to as low as 4,386 at one point, while streamlining its organization and restructuring its business lines. In the second half of 2025, the company’s gross margin recovered from a low of about 5% to about 10%, delivering the firm’s first half-year profit.

In 2026, Pagoda is expanding again. The total store count rose by 53% year on year to 6,709 outlets. Franchised store openings also resumed as the recovery took hold, reversing two years of net store closures.

Much of this growth can be attributed to a new venture launched by Pagoda’s subsidiary Pagoda Commercial in partnership with seven established regional retail chains. Under the “Seven-Star Alliance” (七星联盟), Pagoda contributes its fresh-food supply chain and store-operations expertise, while the partner chains supply their existing stores and local customer bases. The alliance brought 1,951 partner stores into Pagoda’s network by the end of the period, contributing about 720 million yuan ($107.3 million) in consolidated revenue.

Image: Pagoda

This article was based on a Chinese article. Read the original article.