The company has faced massive store closures and dwindling profits throughout its first quarter.

On Friday, April 22, the snack seller Three Squirrels (300783.SZ) reported a net profit attributable to shareholders of CNY 161 million ($24.763 million) in the first quarter of 2022, plunging 48.75% year-over-year. The company also recorded a revenue of CNY 3.089 billion in 2021, down 15.85% over the same period in 2020.

Three Squirrels blamed dwindling profits on rising raw material costs and advertising expenses. According to its 2021 financial report, which was released on the same day, the company posted a revenue of CNY 9.77 billion, down 0.24% year-over-year. It also announced a net profit attributable to shareholders of the listed company of CNY 411 million, registering a year-over-year growth of 36.43%.

Specifically, 66.31% of its total revenue in 2021 came from third-party e-commerce platforms. Tmall contributed CNY 2.956 billion, down 22.3% year-over-year, while JD.com (JD) contributed CNY 2.408 billion, down 11.84% year-over-year.

Meanwhile, the company announced it will continue to improve stores with undesirable performance. Last year, it opened 12 new directly operated stores and closed 43, with a total of 140 by the end of the year. Directly operated stores posted a revenue of CNY 818 million in 2021, down 6.39% from a year earlier and accounting for 8.37% of its total revenue.

The company also opened 341 new franchises and closed 288, with a total of 925 by the end of 2021. Its franchises reported a revenue of CNY 749 million, up 63.3% over the same period of the previous year, accounting for 7.67% of its total revenue.