On the evening of April 28th, the nut snack giant Three Squirrels Inc. released its full-year financial report for 2025.
The data reveals that the company achieved annual operating revenue of 10.189 billion yuan, a slight decrease of 4.08% year-on-year. Net profit attributable to shareholders was 155 million yuan, plummeting by 61.90% compared to the previous year. Even more starkly, the non-GAAP net profit shrank to 49.4015 million yuan, representing a dramatic decline of 84.53%.
Following the highlight of its revenue returning to the 10-billion-yuan mark in 2024, this annual report from Three Squirrels presents a sobering picture. This significant reversal in performance is not an isolated case but reflects the collective anxiety among traditional fast-moving consumer goods (FMCG) snack giants, who are caught in a triple squeeze of channel transformation, cost fluctuations, and competition in a saturated market.
Analysis indicates that the profit decline at Three Squirrels is primarily due to pressure from both cost factors and strategic investments.
On the cost front, 2025 saw volatile global prices for raw nut materials, particularly for core categories such as macadamia nuts and cashews, where international procurement costs increased. As a major player in nuts, Three Squirrels derived approximately 47.34% of its 2025 revenue from nut products. Although this proportion decreased slightly from the previous year, the volatility in raw material prices directly eroded its gross profit margin.
Furthermore, 2025 was a pivotal year for Three Squirrels' transition towards a "premium value-for-money" strategy, and the associated investments also impacted profitability.
It is understood that in 2025, the company launched new store formats called "Life Halls," primarily featuring its own brands, and concurrently established supporting central kitchens focused on fresh and freshly prepared foods. The upfront investment in this infrastructure and the resulting property depreciation significantly increased the expense ratio in the short term, acting as a temporary drag on profits.
However, the performance shift is also influenced by broader industry changes. The entire snack industry is undergoing a profound transfer of power.
Over the past decade, Three Squirrels rose to prominence by capitalizing on the e-commerce boom. Yet, as online customer acquisition costs have risen, its expense ratio has increased instead of decreased. The financial report shows that online sales accounted for 70.43% of Three Squirrels' revenue in 2025. This heavy reliance on a single channel appears particularly disadvantageous as the era of easy online traffic growth recedes.
Simultaneously, discount snack stores, represented by companies like Wanchen Group and Snack Busy, are rapidly reshaping the industry's pricing standards. Through a model that emphasizes "eliminating brand premiums, extreme inventory turnover, and direct sourcing from producers," these discount channels are forcing traditional snack brands into a corner of price wars.
Comparative data highlights this contrast: while traditional giants face performance pressure, Wanchen Group reported nearly 60% revenue growth and a 3.58-fold surge in net profit attributable to shareholders for 2025. This divergence signals that core consumer demand has shifted from paying for brand names to seeking ultimate value for money.
Confronted with the impact of discount snacks, Three Squirrels is not standing idly by.
In 2025, the company firmly implemented its overarching "premium value-for-money" strategy, attempting to regain initiative through an omnichannel approach and deep vertical integration of its supply chain.
On the production side, Three Squirrels has established four intensive supply chain bases across China, covering the East, North, Southwest, and South regions. It has even extended its reach overseas, setting up a mango drying factory in Cambodia. This transition from a light-asset e-commerce model towards a heavy-asset integrated manufacturing model aims to lock in raw material prices and reduce distribution losses through economies of scale.
On the channel front, the newly launched Life Halls are positioned as the "second kitchen at your doorstep," with self-owned brands comprising up to 90% of the offering. Compared to traditional franchise stores, this model places greater emphasis on fresh preparation and differentiation, attempting to sidestep the homogenized competition prevalent in the discount snack sector.
Overall, Three Squirrels' 2025 financial statement is a typical report card of transformation costs. Despite the sharp drop in net profit, it is noteworthy that the company's performance showed signs of recovery in the first quarter of 2026, with single-quarter net profit attributable to shareholders reaching 273 million yuan, exceeding the total for the entire year of 2025.
This releases a positive signal that after a year of strategic adjustment and cost pressure, Three Squirrels' "premium value-for-money" model is beginning to generate synergies in scale and efficiency.
However, in the long term, for the former "Internet snack king," rebuilding its profit-pricing power in the omnichannel era while maintaining its scale of tens of billions of yuan will remain a protracted battle. In an era of存量竞争 (stock competition), easy growth is a thing of the past; every fraction of profit gained will test a company's ability to meticulously refine its supply chain to the utmost degree.
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