Is the first quarter of Three Squirrels a "real recovery"?

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The Q1 report recently disclosed by Three Squirrels presents a completely different picture from the 2025 annual report.

In 2025, the company's revenue and profit both declined: annual revenue dropped 4.08% year-on-year to 10.1 billion yuan, and net profit excluding non-recurring items was only 49.4 million yuan, down 84.53% YoY.

However, entering Q1 2026, revenue recovered with 3.01% growth, reaching 3.835 billion yuan; profit improved even more significantly, with net profit excluding non-recurring items increasing by over 50% YoY.

Some marginal improvements in operations have begun to show.

On one hand, adjustments on the supply chain and cost end are gradually materializing. In the past two years, the company has promoted intensive production and origin layout around the strategy of “high-end cost performance,” increasing the proportion of self-production and shortening supply chains.

In Q1, Three Squirrels’ gross margin was 27.33%, up 0.59 percentage points YoY; meanwhile, inventory dropped significantly, capital occupancy and impairment pressure eased simultaneously, and operating quality improved.

On the other hand, channel structure optimization has begun to take effect.

Against the backdrop of rising share of short video e-commerce, the company strengthened omni-channel coordination through the “D+N” model, and in content e-commerce shifted from relying on paid traffic to refined operation — driving conversions with blockbuster SKUs and focusing on ROI as the core goal, leading to profit improvement outpacing revenue growth.

Strategically, the company is transforming from a leisure snack brand into a full-category self-owned brand retailer covering family consumption scenarios. The newly incubated “Lifestyle Store” business, positioned as “Good goods at low prices, essentials for three meals”, is entering the community retail sector via “direct sourcing from origin + regional cold chain + self-owned brand”.

Channel and category strategies that are significantly different from peers have brought differentiated performance results.

While other brands lean resources towards blockbuster SKUs via emerging channels, in 2025, Three Squirrels’ core nut category revenue fell about 10% YoY, while baked goods and meat products provided structural support with growth of approximately 26% and 15% respectively.

However, compared horizontally across the industry, the company’s Q1 revenue growth rate of 3.01% ranks relatively lower among disclosed leisure snack companies, while Qiaqia Food’s revenue grew over 40% in the same period, and Jinzi Food also maintained a relatively high 24% growth.

Moreover, in terms of channels, e-commerce remains the fundamental revenue base for Three Squirrels, but it is also a major factor dragging on profitability.

In 2025, revenue from third-party e-commerce platforms reached 7.176 billion yuan, accounting for 70.42% of total revenue. Of this, Douyin channel revenue was 2.272 billion yuan, accounting for 22.3%, surpassing Taotian system’s 16.87% and JD system’s 14.85%.

Before the offline shortcoming is made up for, more data is still needed to verify the company's inflection point for growth.

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