Revenue of 43.2 billion, profit down 14%. Haidilao's "side business" hasn't yet fully grown.

AI Questions · Why did Haidilao’s second-half performance rebound after Zhang Yong returned?

On March 24, Haidilao released its 2025 annual report. This is Zhang Yong’s first annual results since he returned to the CEO role. Full-year revenue was 43.23B yuan, up slightly 1.1% year over year. Behind what looks like steady numbers, however, profit pressure is prominent: profit for the year was 4.04B yuan, down 14% year over year; core operating profit was 5.4B yuan, with the decline also reaching 13.3%. Revenue barely increased, yet profits shrank noticeably.

Weakness in core operations is the main reason. In 2025, Haidilao’s own-operated restaurants saw their table-turn rate drop from 4.1 times per day to 3.9 times per day. The total number of customers served over the year fell to 384 million person-times, down 7.5% year over year. Restaurant operating revenue was 37.54B yuan, down 7.1% year over year. Even though the number of self-operated outlets rose to 1,383, business at each store continued to weaken. Average spend per customer rose only slightly from 97.5 yuan to 97.7 yuan. The decline in customer traffic was not due to price cuts; rather, in-store consumption demand genuinely decreased.

In terms of store layout, Haidilao is also making structural adjustments. During the year, it closed 85 self-operated restaurants and opened 79, resulting in a net decrease of 6. Franchise stores increased from 13 to 79. Among them, 45 shifted from self-operated to franchised. Franchise business revenue surged from 16.71 million yuan to 270 million yuan. Although the scale is still small, the direction is clear: franchising is being used to share operating pressure.

Higher costs further squeezed profit margins. The ratio of raw material and consumables costs to revenue rose from 37.9% to 40.5%, while employee cost as a percentage was basically steady at 32.6%. The reason is that, to stabilize operations, the company rolled out more high value-for-money products and fresh-cut dishes, and at the same time increased investment in store service and in-store scenarios—real costs rose first.

Right now, Haidilao’s incremental growth is mainly supported by two new businesses. Delivery business revenue was 2.66B yuan, up 111.9% year over year. The number of delivery outlets nationwide has exceeded 1,200. The “Other Restaurants” business composed of secondary brands that Red Pomegranate plans to incubate saw revenue rise from 483 million yuan to 1.52B yuan, an increase of 214.6%. It currently operates 20 sub-brands and 207 restaurants. But combined, these two segments account for only 9.7% of total revenue, and both are still in the investment stage. They have not yet formed large-scale profit; with operating pressure from the main business and a lack of maturity in the side business, profits are naturally dragged down.

However, the adjustments after Zhang Yong returned have started to show results. In the second half of 2025, performance rebounded clearly. Year over year revenue growth shifted from the first half’s decline of 3.7% to an increase of 5.9%. The core operating profit decline also narrowed from 14% to 12.7%. Still, Haidilao is currently in a crucial transition period. The downturn in the main brand’s table-turn rate and customer traffic has not yet been fully reversed. Franchising and sub-brands bring new hope, but they still need time to be developed. Whether profits can rebound in 2026 depends largely on whether delivery and sub-brands can quickly achieve scale and truly shoulder the banner for performance.