GreenTree Hospitality Group Ltd. Reports Second Quarter of 2026 Financial Results

• Total revenues decreased by 18.7% year over year to RMB235.1 million (US$34.7 million)^[1].
• Income from operations was RMB48.2 million (US$7.1 million)^[1] compared to RMB49.2 million for the second quarter of 2025.
• Net income was RMB21.3 million (US$3.1 million)^[1] compared to RMB160.0 million for the second quarter of 2025.
• Core net income (non-GAAP)^[3] increased 4.4% year over year to RMB47.2 million (US$7.0 million)^[1]

SHANGHAI, Aug. 24, 2026 /PRNewswire/ -- GreenTree Hospitality Group Ltd. (NYSE: GHG) ("GreenTree", the "Company", "we", "us" and "our"), a leading hospitality and restaurant management group in China, today announced its unaudited financial results for the second quarter of 2026.

Second Quarter of 2026 Operational Highlights

Hotels

• A total of 4,615 hotels with 330,029 hotel rooms were in operation as of June 30, 2026.
• The Company opened 18 hotels in the second quarter of 2026 and had a pipeline of 1,278 hotels contracted for or under development as of June 30, 2026. 
• The average daily room rate was RMB157, a decrease of 5.3% from RMB166 in the second quarter of 2025.
• The occupancy rate was 65.2%, decreased from 67.9% in the second quarter of 2025. 
• Revenue per available room, or RevPAR, was RMB103, a 9.1% year-over-year decrease.

Restaurants

• A total of 198 restaurants were in operation as of June 30, 2026.
• The AC (average check) was RMB36, a 15.5% year-over-year decrease.
• The ADT (average daily tickets) was 81, decreased from 85 in the second quarter of 2025.
• The ADS (average daily sales per store) was RMB2,893, a decrease of 20.3% from RMB3,629 in the second quarter of 2025.

Second Quarter of 2026 Financial Results

Total revenues were RMB235.1 million (US$34.7 million)^[1], an 18.7% year-over-year decrease.  

Hotel revenues were RMB204.6 million (US$30.2 million)^[1], a 16.2% year-over-year decrease due to a 9.1% year-over-year decrease in RevPAR and a net closure of 13 L&O hotels since the second quarter of 2025 due to lease expiration and strategic reviews. The decrease was partially offset by revenues from new openings.

Restaurant revenues were RMB30.5 million (US$4.5 million)^[1], a 33.5% year-over-year decrease, mainly due to a 20.3% decrease in ADS and a net closure of 2 L&O stores since the second quarter of 2025 due to strategic reviews, offset by revenues from new F&M store openings.

Total revenues for the first six months of 2026 were RMB462.8 million (US$68.2 million)^[1], a 16.5% year-over-year decrease.

Total revenues from leased-and-operated, or L&O, hotels and restaurants were RMB95.9 million (US$14.1 million)^[1], a 28.5% year-over-year decrease.

Total revenues from L&O hotels were RMB77.6 million (US$11.4 million)^[1], a 26.8% year-over-year decrease. The decrease was primarily attributable to a 15.3% year-over-year decrease in the second quarter RevPAR of L&O hotels, a net closure of 13 L&O hotels since the second quarter of 2025, and the reduction in sublease revenues resulting from the closure of L&O hotels.

Total revenues from L&O restaurants were RMB18.2 million (US$2.7 million)^[1], a 35.7% year-over-year decrease, mainly due to a net closure of 2 L&O stores and the year-over-year decrease of 15.1% in L&O store's ADS.

Total revenues from L&O hotels and restaurants for the first six months of 2026 were RMB190.4 million (US$28.1 million)^[1], a 24.7% year-over-year decrease.

Total revenues from franchised-and-managed, or F&M, hotels and restaurants were RMB126.8 million (US$18.7 million)^[1], an 8.8% year-over-year decrease.

Total revenues from F&M hotels were RMB126.3 million (US$18.6 million)^[1], an 8.2% year-over-year decrease, primarily due to an 8.8% decrease in F&M hotels' RevPAR, an exemption of management fees for hotels facing business difficulties, and a decline of RMB3.0 million in membership revenues. For comparability, the year-over-year change is presented on a basis that applies the same fee-exemption treatment to the corresponding period of 2025. The decrease in membership revenues was partially due to the amortization cycle started from the pandemic period three years ago, in which the sales of membership cards were historically under-performed.

Total revenues from F&M restaurants were RMB0.5 million (US$74,498.4)^[1], a 64.4% year-over-year decrease, mainly due to a decrease of 12.8% in the ADS of F&M stores and an exemption of management fees.

Total revenues from F&M hotels and restaurants for the first six months of 2026 were RMB242.1 million (US$35.7 million)^[1], an 8.5% year-over-year decrease.

Total revenues from wholesale and others were RMB12.5 million (US$1.8 million)^[1], a 22.9% year-over-year decrease, mainly due to the decline in the wholesale segment of the restaurant business.

Total revenues from wholesale and others for the first six months of 2026 were RMB30.4 million (US$4.5 million)^[1], a 16.9% year-over-year decrease.

Total operating costs and expenses

Operating costs were RMB146.5 million (US$21.6 million)^[1], a 20.0% year-over-year decrease.

Operating costs of the hotel business were RMB120.6 million (US$17.8 million)^[1], a 16.4% year-over-year decrease. The decrease was mainly attributable to lower staff related costs, lower depreciation and amortization, and lower rental costs caused by the net closure of 13 L&O hotels since the second quarter of 2025.

Operating costs of the restaurant business in the second quarter of 2026 were RMB26.0 million (US$3.8 million)^[1], a 34.4% year-over-year decrease, due to the closure of L&O stores.

For the first six months of 2026, operating costs were RMB305.3 million (US$45.0 million)^[1], a 17.6% decrease.

Selling and marketing expenses were RMB10.2 million (US$1.5 million)^[1], a 2.7% year-over-year decrease.

Selling and marketing expenses of the hotel business were RMB8.9 million (US$1.3 million)^[1], a 5.6% year-over-year increase. The increase was mainly due to higher advertising and commission expenses.

Selling and marketing expenses of the restaurant business were RMB1.3 million (US$0.2 million)^[1], a 36.6% year-over-year decrease, mainly attributable to lower advertising expenses and lower sales-channel commissions.

For the first six months of 2026, selling and marketing expenses were RMB21.6 million (US$3.2 million)^[1], a 21.5% decrease.

General and administrative, or G&A expenses were RMB28.1 million (US$4.1 million)^[1], a 35.0% year-over-year decrease.

G&A expenses of the hotel business were RMB25.1 million (US$3.7 million)^[1], a 34.0% year-over-year decrease. The decrease was mainly due to lower G&A staff related expenses, lower credit losses for accounts receivable and lower consulting fees.

G&A expenses of the restaurant business were RMB3.0 million (US$0.4 million)^[1], a 41.6% year-over-year decrease, mainly due to lower G&A staff related expenses and lower credit losses for accounts receivable.

General and administrative expenses for the first six months of 2026 were RMB55.1 million (US$8.1 million)^[1], a 38.9% year-over-year decrease.

Other operating expenses were RMB0.2 million (US$28,235.0)^[1].
Other operating expenses for the first six months of 2026 were RMB3.4 million (US$0.5 million)^[1], decreased from RMB4.7 million one year ago.

Other general expenses were RMB4.6 million (US$0.7 million)^[1], mainly attributable to provisions for franchisee loans.

Other general expenses for the first six months of 2026 were RMB9.7 million (US$1.4 million)^[1], a decrease from RMB11.6 million one year ago.

Gross profit was RMB88.6 million (US$13.1 million)^[1], a year-over-year decrease of 16.6%. Gross margin was 37.7%, compared to 36.7% a year ago. The gross profit of the hotel business was RMB84.0 million (US$12.4 million)^[1], a 15.9% year-over-year decrease. The gross profit of the restaurant business was RMB4.6 million (US$0.7 million)^[1], a 27.5% year-over-year decrease.

Income from operations in the second quarter of 2026 was RMB48.2 million (US$7.1 million)^[1], compared to income from operations of RMB49.2 million in the second quarter of 2025, with a margin of 20.5%. The stable profitability was mainly attributable to lower operating costs and expenses, despite the decline in revenue.

Income from operations of the hotel business was RMB46.7 million (US$6.9 million)^[1], compared to an income from operations of RMB50.2 million in the second quarter of 2025, with a margin of 22.8%.

Income from operations of the restaurant business in the second quarter of 2026 was RMB1.6 million (US$0.2 million)^[1], compared to loss from operations of RMB1.0 million in the second quarter of 2025, with a margin of 5.2%.

Income from operations for the first six months of 2026 was RMB76.9 million (US$11.3 million)^[1] compared to income from operations of RMB60.5 million in 2025, with a margin of 16.6%.

Net income in the second quarter of 2026 was RMB21.3 million (US$3.1 million)^[1], compared to a net income of RMB160.0 million in the second quarter of 2025, and net margin was 9.0%.

Net income of the hotel business was RMB19.7 million (US$2.9 million)^[1], compared to a net income of RMB161.2 million in the second quarter of 2025, and net margin was 9.7%. Hotel net income in the second quarter of 2025 was impacted by the one-time divestment of our ownership in Argyle and fair value fluctuation in securities. Besides, hotel net income was also impacted by foreign exchange losses, bad debt expenses driven by accounts receivables, and withholding tax due to dividends distributions.

Net income of the restaurant business in the second quarter of 2026 was RMB1.5 million (US$0.2 million)^[1], compared to a net loss of RMB1.2 million in the second quarter of 2025, and net margin was 4.9%.

Net income for the first six months of 2026 was RMB35.3 million (US$5.2 million)^[1], compared to a net income of RMB167.8 million in 2025, and net margin was 7.6%.

Adjusted EBITDA (non-GAAP)^[2] in the second quarter of 2026 was RMB68.9 million (US$10.2 million)^[1], a year-over-year decrease of 12.1%. Adjusted EBITDA margin, defined as adjusted EBITDA (non-GAAP)^[2] as a percentage of total revenues, was 29.3%, compared to 27.1% a year ago.

Adjusted EBITDA (non-GAAP)^[2] for the first six months of 2026 was RMB122.1 million (US$18.0 million)^[1], a year-over-year increase of 3.5%.

Core net income (non-GAAP)^[3] in the second quarter of 2026 was RMB47.2 million (US$7.0 million)^[1], a year-over-year increase of 4.4%. The core net margin, defined as core net income (non-GAAP)^[3] as a percentage of total revenues, was 20.1%, compared to 15.6% one year ago.

Core net income (non-GAAP)^[3] for the first six months of 2026 was RMB71.1 million (US$10.5 million)^[1], a year-over-year increase of 16.2%.

Earnings per American Depositary Share, or ADS^[4] (basic and diluted) were RMB0.21 (US$0.03)^[1], decreased from RMB1.59 one year ago.

Earnings per American Depositary Share, or ADS^[4] (basic and diluted) for the first six months of 2026 were RMB0.36 (US$0.05)^[1], decreased from RMB1.68 one year ago. 

Core net income per ADS^[4] (basic and diluted) (non-GAAP) was RMB0.47 (US$0.07)^[1], increased from RMB0.45 a year ago.

Core net income per ADS^[4] (basic and diluted) (non-GAAP) was RMB0.70 (US$0.10)^[1] for the first six months of 2026, an increase from RMB0.60 a year ago.

Cash Flow. Operating cash inflow in the second quarter of 2026 was RMB23.3 million (US$3.4 million)^[1] as a result of income from operations. The amount decreased by RMB23.3 million compared with the second quarter of 2025, primarily due to a net decline of approximately RMB31.0 million in accounts payable to franchisees. Investing cash outflow was RMB25.0 million (US$3.7 million)^[1], which was primarily due to purchase of equipment for newly opened L&O hotels and loans for the renovation of newly opened resort hotels from strategic reviews. Financing cash outflow was RMB0.2 million (US$29,476.0)^[1], mainly due to repayment of bank borrowings.

Cash and cash equivalents, restricted cash, short-term investments, investments in equity securities and time deposits. As of June 30, 2026, the Company had total cash and cash equivalents, restricted cash, short term investments, investments in equity securities and time deposits of RMB2,000.3 million (US$294.8 million)^[1], compared to RMB2,010.2 million as of March 31, 2026. The decrease was mainly due to investment on purchase of equipment for newly opened L&O hotels and loans for the renovation of newly opened resort hotels from strategic reviews, partially offset by cash from operating activities.

Guidance

Based on our performance in the first half year, we maintain our previous revenue guidance for the hotel business, that we expect revenue to decrease by 10% to 15% year over year for the year of 2026. The guidance set forth above reflects the Company's current and preliminary views based on its recovery and may not be indicative of the final financial results for any future periods or the full year.

Recent Development

In 2025, we entered into an agreement to acquire a hotel property located opposite the Twin Towers in Malaysia for strategic purposes. This property was handed over in July 2026 and will serve as our flagship asset to scale our hotel network across Malaysia and the broader Southeast Asian market.

In 2025, we entered into a letter of intent to acquire a landmark property along the Huangpu River waterfront in Yangpu District, Shanghai, and subsequently won the bid for the property through a competitive bidding process. The property is planned to be developed into the Company's signature flagship hotel in Shanghai, anchoring our mid-to-up-scale strategy at one of the city's prime riverfront locations. Beyond hotel operations, the property will feature a curated regional lifestyle center with food-and-beverage and other amenities designed to complement the hotel, enhance the guest experience and generate additional recurring revenue streams, while one floor will house the Company's corporate offices. The remaining closing procedures are expected to be completed before the end of the third quarter of 2026, subject to customary closing conditions.

Share Repurchase Program

The Board of Directors has approved a share repurchase program authorizing the Company to repurchase up to US$5 million of its Class A ordinary shares over a two-year period, effective from the date of approval. Repurchases may be conducted through open market transactions at prevailing market prices, privately negotiated transactions, block trades or other legally permitted methods, at the Company's discretion, subject to market conditions, applicable securities laws and regulations, and the trading price of the Company's ADSs. The program may be suspended, modified or terminated at any time at the Board's discretion without prior notice. 

Use of Non-GAAP Financial Measures

We believe that Adjusted EBITDA and core net income, as we present them, are useful financial metrics to assess our operating and financial performance before the impact of investing and financing transactions, income taxes and certain non-core and non-recurring items in our financial statements.

The presentation of Adjusted EBITDA and core net income should not be construed as an indication that our future results will be unaffected by other charges and gains we consider to be outside the ordinary course of our business.

The use of Adjusted EBITDA and core net income has certain limitations because it does not reflect all items of income and expenses that affect our operations. Items excluded from Adjusted EBITDA and core net income are significant components in understanding and assessing our operating and financial performance. Depreciation and amortization expense for various long-term assets, income tax and share-based compensation have been and will be incurred and are not reflected in the presentation of Adjusted EBITDA. Each of these items should also be considered in the overall evaluation of our results. Additionally, Adjusted EBITDA and core net income do not consider capital expenditures and other investing activities and should not be considered as a measure of our liquidity. We compensate for these limitations by providing the relevant disclosure of our depreciation and amortization, interest expense/income, gains/losses from investments in equity securities, income tax expenses, share-based compensation, share of loss in equity investees, subsidies and other relevant items both in our reconciliations to the corresponding U.S. GAAP financial measures and in our consolidated financial statements, all of which should be considered when evaluating our performance.

The terms Adjusted EBITDA and core net income are not defined under U.S. GAAP, and Adjusted EBITDA and core net income are not measures of net income, operating income, operating performance or liquidity presented in accordance with U.S. GAAP. When assessing our operating and financial performance, you should not consider this data in isolation or as a substitute for our net income, operating income or any other operating performance measure that is calculated in accordance with U.S. GAAP. In addition, our Adjusted EBITDA and core net income may not be comparable to Adjusted EBITDA and core net income or similarly titled measures utilized by other companies since such other companies may not calculate Adjusted EBITDA and core net income in the same manner as we do.

Reconciliations of the Company's non-GAAP financial measures, including Adjusted EBITDA and core net income, to the consolidated statement of operations information are included at the end of this press release.

About GreenTree Hospitality Group Ltd.

GreenTree Hospitality Group Ltd. ("GreenTree" or the "Company") (NYSE: GHG) is a leading hospitality and restaurant management group in China. As of June 30, 2026, GreenTree had a total number of 4,615 hotels and 198 restaurants. GreenTree was the fourth largest hospitality company in China in 2025 according to the China Hospitality Association. In 2025, HOTELS magazine ranked GreenTree 12th among the 225 largest global hotel groups in terms of number of hotels in its annual HOTELS' 225.

GreenTree has a broad portfolio of diverse brands spanning from the economy to mid-scale, mid-to-up-scale and luxury segments of the hospitality industry mainly in China. Through its strong membership base, expansive booking network, and efficient system, GreenTree aims to keep closer relationships with all of its clients and partners by providing a diverse brand portfolio that features comfort, style and value.

For more information on GreenTree, please visit http://ir.998.com

Safe Harbor Statements

This press release contains forward-looking statements made under the "safe harbor" provisions of Section 21E of the Securities Exchange Act of 1934, as amended, and the U.S. Private Securities Litigation Reform Act of 1995. In some cases, these forward-looking statements can be identified by words or phrases such as "may," "will," "expect," "anticipate," "aim," "estimate," "intend," "plan," "believe," "potential," "continue," "is/are likely to," "confident," "future," or other similar expressions. GreenTree may also make written or oral forward-looking statements in its reports filed with or furnished to the U.S. Securities and Exchange Commission, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Any statements that are not historical facts, including statements about or based on GreenTree's current beliefs, expectations, assumptions, estimates and projections about us and our industry, are forward-looking statements that involve known and unknown factors, risks and uncertainties that may cause our actual results, performance or achievements to be materially different from those expressed or implied by the forward-looking statements. Such factors and risks include, but not limited to the following: GreenTree's goals and growth strategies; its future business development, financial condition and results of operations; trends in the hospitality industry in China and globally; competition in our industry; fluctuations in general economic and business conditions in China and other regions where we operate; the regulatory environment in which we and our franchisees operate; and assumptions underlying or related to any of the foregoing. You should not place undue reliance on these forward-looking statements. Further information regarding these and other risks, uncertainties or factors is included in the Company's filings with the U.S. Securities and Exchange Commission. All information provided, including the forward-looking statements made, in this press release are current as of the date of the press release. Except as required by law, GreenTree undertakes no obligation to update any such information or forward-looking statements to reflect events or circumstances after the date on which the information is provided or statements are made, or to reflect the occurrence of unanticipated events.

Financial Tables and Operational Data Follow