On July 14th, Bestore Co.,Ltd. released its performance forecast for the first half of 2026, officially signaling a return to profitability for the period. The company anticipates its net profit attributable to shareholders to range between 16 million yuan and 24 million yuan, a significant improvement from a loss of 93.55 million yuan in the same period last year. Excluding non-recurring gains and losses, the net profit is projected to be between 9.5 million yuan and 17.5 million yuan, compared to a non-GAAP loss of 119 million yuan a year earlier.

This turnaround marks the first instance of semi-annual profit recovery following nearly two years of operational adjustments. However, from a historical perspective, the current profit level is only roughly equivalent to that of the first half of 2024. This indicates that after two years of strategic realignment and operational contraction, the company has merely stemmed its losses and has not yet entered a phase of substantive growth.

Operational Challenges and Strategic Adjustments

Since 2023, Bestore has faced persistent operational pressures. The rapid rise of the bulk snack retail model, with brands like Zhao Yiming and Snack Busy capturing market share through extreme cost-effectiveness, expansion into lower-tier markets, and high inventory turnover, has significantly impacted traditional premium snack brands. Bestore, which previously focused on a high-end positioning and relied on a shopping mall store network, carried relatively high fixed costs such as rent and labor. In a market environment characterized by more rational consumption and heightened price sensitivity, its original business model came under considerable strain.

Performance pressures began to materialize in 2023, with a sharp decline in net profit that year. In 2024, the company proactively adjusted its strategy, implementing a "price reduction without quality reduction" initiative, adjusting prices for hundreds of products, while increasing efforts in store renovations and franchisee support. This led to a short-term increase in expenses and pressure on product gross margins, causing profit margins to continue contracting. In the first half of 2025, the initial pains of these adjustments were concentratedly felt, resulting in the company's first significant semi-annual loss since its listing, marking a peak in operational pressure.

Drivers of the Turnaround

According to the reasons for the performance change disclosed in the latest forecast, this return to profitability stems primarily from two core factors. The first is a year-on-year improvement in revenue scale and product gross margin. The second is the effective implementation of refined operations, achieving better control over operating costs through cost reduction and efficiency enhancement measures.

Industry Context and Comparative Performance

Looking at the overall industry performance, the snack food sector was in a recovery phase during the first half of 2026, with leading companies generally showing trends of gross margin repair, narrowing losses, and improving performance. Peers such as Yanjin Shop and Three Squirrels, leveraging their omnichannel layouts and supply chain efficiency improvements, have already completed a fundamental recovery ahead of others. Bestore's current return to profit aligns with this industry recovery trend, but the strength of its recovery appears relatively weaker.

Assessment of Profit Quality

From the perspective of profit quality, the company's current operations still exhibit notable weaknesses. The forecasted range for net profit attributable to shareholders is significantly higher than that for non-GAAP net profit, indicating that non-recurring gains and losses have made a positive contribution to the current period's results. The core business's own ability to generate profit has not been fully restored. Considering the company's revenue scale, the net profit margin corresponding to the reported profit remains at a low level, pointing to relatively weak profitability.