Hf Foods Group Q2 Earnings Call Highlights

Hf Foods Group NASDAQ: HFFG reported record quarterly revenue in the second quarter of 2026, while profitability was pressured by tariffs, higher fuel expenses and softer dine-in traffic. Management also highlighted its pending acquisition of Canadian seafood importer and distributor Searay Foods as a key step in expanding beyond the United States. Net revenue rose 2.8% from a year earlier to $323.8 million for the quarter ended June 30, marking the company’s highest quarterly revenue on record. The increase reflected volume growth and improved pricing in seafood, as well as volume growth in commodity products, partly offset by lower meat and poultry prices, Chief Financial Officer Paul McGarry said. “We continued to build momentum in the second quarter, even as tariff pressure, softer foot traffic, and rising fuel costs continued to weigh on the industry,” President and Chief Executive Officer Felix Lin said. Gross profit was essentially unchanged at $55 million, compared with $55.1 million a year earlier. Gross margin declined to 17.0% from 17.5%, which McGarry attributed primarily to incremental tariffs that took effect beginning in the third quarter of 2025. The company received some refunds related to IEEPA tariffs during the quarter, partially offsetting the pressure. Adjusted EBITDA declined 2% to $13.6 million, with the adjusted EBITDA margin narrowing to 4.2% from 4.4%. Distribution, selling and administrative expenses increased 2.4% to $52.2 million, driven in part by approximately $1.4 million in higher year-over-year fuel costs, as well as increased insurance and professional-services expenses. Lower personnel costs stemming from transformation initiatives partly offset those increases. Net income attributable to HF Foods increased to $2.6 million, or $0.05 per share, from $1.2 million, or $0.02 per share, in the prior-year period. McGarry said the increase was supported by a $1.8 million employee retention credit including interest, about $1.1 million in IEEPA tariff refunds, and a $1.4 million favorable year-over-year change in the fair value of interest-rate swap contracts. Those benefits were partly offset by a $1.3 million decline in income from operations and a $0.7 million year-over-year change in net income attributable to non-controlling interests. Adjusted net income attributable to HF Foods was essentially flat at $6.4 million, while adjusted earnings per share remained unchanged at $0.12. The company said it has now posted six consecutive quarters of year-over-year revenue growth. On a trailing 12-month basis, HF Foods generated approximately $1.25 billion in net revenue, according to McGarry. HF Foods entered into a definitive agreement on July 17 to acquire Searay Foods, a Richmond, British Columbia-based importer and distributor of ethnic and specialty frozen se.