Q2 2026 Hf Foods Group Inc Earnings Call Transcript
Key Points
- Record quarterly net revenue of $323.8 million, up 2.8% year-over-year, marking the sixth consecutive quarter of growth.
- Strategic acquisition of Searay Foods, a high-margin Canadian seafood distributor, expected to be accretive to margins and EPS from close.
- Refinanced and upsized credit facility to $140 million revolving and $125 million term loans, providing significant liquidity for growth.
- Continued progress on transformation initiatives, including facilities upgrades and digital infrastructure, positioning for long-term efficiency gains.
- Gross profit remained stable at $55 million despite tariff and fuel cost headwinds, supported by volume growth in seafood and commodities.
- Adjusted EBITDA declined 2% year-over-year to $13.6 million, with margin contracting to 4.2% from 4.4%.
- Gross profit margin decreased to 17% from 17.5%, impacted by incremental tariffs and rising input costs.
- Elevated fuel costs added approximately $1.4 million in expenses during the quarter, pressuring DS&A.
- Softer foot traffic in dine-in and buffet restaurants continues to weigh on sales, partially offset by takeout strength.
- Near-term margin pressure expected to persist as the company remains in 'conquest mode' with promotional pricing and capacity expansions not fully operational until late 2026 or 2027.
Greetings, and welcome to the HF Foods Group second quarter 2026 earnings call. (Operator Instructions)
Please note this conference is being recorded. I would now like to turn the conference over to your moderator today, John DiDomenico of ICR. Please proceed.
Hello, everyone. Welcome to HF Foods Group's second quarter 2026 earnings conference call. Joining me on today's call are Felix Lin, the company's President and Chief Executive Officer; and Paul McGarry, the company's Chief Financial Officer.
Before we begin, let me remind everyone that today's discussion contains forward-looking statements based on management's current beliefs and expectations about future events, which are subject to a number of known and unknown risks and uncertainties, including statements regarding our previously announced agreement to acquire Searay Foods and the timing, terms, and anticipated benefits of that transaction.
If you refer to HF Foods' earnings release, the Searay acquisition
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