Key facts
- Want Want China Holdings Ltd. has begun layoffs and requires employee self-evaluations.
- The company reported a 38% plunge in net profit for the first quarter of fiscal 2026.
- Revenue fell approximately 6% year-over-year in the same period.
- Chairman Tsai Eng-meng characterized the situation as a "major operational crisis" due to product innovation failures and rising costs.
- Traditional wholesale channel revenue saw a double-digit decline.
Want Want China Holdings Ltd. is implementing layoffs and requiring employees to submit self-evaluation reports as it confronts a significant profit slump and what its chairman has termed a "major operational crisis." The company's first quarter of fiscal 2026 saw revenue fall approximately 6% year-over-year, with net profit plunging roughly 38%. This decline is attributed to a double-digit drop in traditional wholesale channel revenue, high single-digit growth in operating expenses, and persistently rising raw material costs.
Chairman Tsai Eng-meng acknowledged in an internal letter that the company has relied on a few flagship products for nearly three decades without sufficient innovation. While the dairy and beverage segment accounts for half of total revenue, core product Want Want Milk saw a slight decline, and rice crackers remained nearly stagnant. Only the snack food segment achieved notable growth of 10.4%, insufficient to offset broader declines.
Consumers have voiced concerns about the company's products, particularly regarding sugar content, with discussions trending online. In response, Want Want has highlighted its existing portfolio of sugar-free and low-sugar options and stated its commitment to innovation. The company, founded in 1962 and listed in Hong Kong in 2008, sells products globally and faces structural challenges including shifting consumer preferences toward healthier options and disruptions in its distribution network.