HFFG

Image source: The Motley Fool. Monday, Aug. 10, 2026 at 4:30 p.m. ET President and Chief Executive Officer - Xi Lin Chief Financial Officer - Paul E. McGarry Operator: Greetings, and welcome to the HF Foods Group's Second Quarter 26 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. Please note this conference is being recorded. I would now like to turn the conference over to your moderator today, Jonathan DeDomenico of ICR. Please proceed. Jonathan DeDomenico: Hello, everyone. Welcome to HF Foods Group Second Quarter 26 Earnings Conference Call. Joining me on today's call are Xi Lin, the company's President and Chief Executive Officer and Paul E. 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 Sea Ray Foods and the timing terms, and anticipated benefits of that transaction. If you refer to HF Foods earnings release, the Sea Ray acquisition press release, as well as the company's most recent SEC filings you will see a discussion of factors that could cause the company's actual results to differ materially from those expressed or implied by these forward looking statements. The company undertakes no obligation to update or revise these forward looking statements in the future. In these remarks, the company will make several references to non GAAP financial measures. Including adjusted EBITDA and non GAAP diluted earnings per share. We believe that these measures provide investors with a useful perspective on the underlying growth trends of the business. And I have included in the earnings release a full reconciliation of non GAAP financial measures to the most comparable GAAP measures. Operator: Now will turn the call over to Xi Lin. Xi Lin: Hello, everyone. Welcome to HF Foods second quarter 26 earnings call. I will provide a business update, and Paul will speak to our second quarter financial results. Then we will open up the line for Q&A. We continue to build momentum in the second quarter even as tariff pressure softer foot traffic, and rising fuel costs continue to weigh on the industry. Net revenue increased 2.8% year over year to $323.8 million our highest ever quarterly revenue. Gross profit was essentially flat at $55 million for the quarter. Adjusted EBITDA was $13.6 million, down 2% year over year representing a 4.2% margin compared to 4.4% in the prior year quarter. These results are especially impressive on a year over year basis given that last year's second quarter benefited from low cost inventory positions and better pricing. Which lifted margins in the second quarter of 25. We continue to make progress on our long term transformation plan this quarter, including our sales operations digital infrastructure, and facilities upgrades. We remain confident these investments are building a stronger foundation for sustainable growth. Even as we continue to navigate some near term pressure from rising fuel costs. Which we are actively managing. The clearest proof point of our strategy came on July 17, when we enter into a definitive agreement to acquire Sea Ray Foods a leading Canadian importer and distributor of ethnic and specialty frozen seafood, based in Richmond, British Columbia. it is our first transaction outside The United States. and extends our M&A playbook into a new geography. Sea Ray brings 6 proprietary brands including Sea Ray Foods, High Best, Cindy's Best, SmartFish, Diamond Shrimp, and Go Label. Into our seafood category. Which already makes up about 36% of our net revenue. Sea Ray has grown revenue at roughly 15% a year since 2019. With EBITDA margins in the mid teens and approximately 5x Sea Ray's 2025 adjusted EBITDA we expect the transaction to be accretive to both margins and EPS from close. Supporting the consolidated adjusted EBITDA margin target of 4.5 to 5% plus we have laid out for the next 3 to 5 years. We expect to close in the third quarter subject to customary conditions and regulatory approval. And Sea Ray's existing management team led by incoming CEO, Derek Ng, will continue running the business day to day. Consideration is a mix of cash and HF Foods stock, and we will disclose the final split at closing. Once closed, Sea Ray gives us a platform to grow in Canada. Sea Ray's business carries a margin profile well above our current company, and it becomes a meaningful part of our growth story in the market for years to come. Beyond Sea Ray, M&A remains a core pillar of our growth strategy. HF Foods is the only scale food service provider in the Asian specialty market in The United States. And we believe we are the strategic acquirer of choice within our space. We are focused on expanding our geographic footprint in high potential markets. Capturing operational synergies broadening our customer base, and enhancing our product and service capabilities. We remain disciplined but optimistic about additional M&A opportunities in 2026 and beyond. And are actively evaluating opportunities from potential sellers who understand our unique position. We believe our proven ability to successfully navigate the tariff landscape positions us uniquely to identify and execute attractive tuck in acquisition that will benefit from our operational expertise and scale. I want to emphasize the significant runway ahead of us. The $50 billion addressable market we have talked about historically reflects the US alone, and with Sea right now giving us a foothold in Canada our total opportunity is even larger. At just over $1 billion in net revenue, we are the largest player in the Asian specialty space. No 1, whether larger or smaller competitors, is better positioned than HF Foods to capture this opportunity in the coming years. Now Paul, our CFO, will walk you through more details of our financial performance for the quarter. Paul E. McGarry: Thanks, Xi. I will now review our results for the quarter ended June 30, 2026. Versus the same period in 2025. Net revenue for the quarter increased 2.8% or $8.9 million to $323.8 million from $314.9 million in the prior year quarter. The increase was primarily due to volume growth and improved pricing in seafood, followed by volume growth in commodity, partially offset by price decrease in meat and poultry. Gross profit was $55 million for the quarter, essentially flat compared to $55.1 million in the prior year quarter. Gross profit margin decreased to 17% for the quarter compared to 17.5% in the prior year quarter. Margin was impacted by incremental tariffs that took effect beginning Q3 of 25 partially offset by some IEEPA tariff refunds received during the quarter. Distribution, selling and administrative expense, or DS&A, increased $1.2 million or 2.4% to $52.2 million for the quarter. The increase was driven primarily by higher auto and truck expense reflecting elevated incremental fuel costs of approximately $1.4 million year over year. Together with higher insurance and professional service expense, partially offset by lower personnel expense as a result of our transformation initiatives. DS&A as a percentage of net revenue was 16.1% for the quarter compared to 16.2% in the prior year quarter. Adjusted EBITDA decreased 2% to $13.6 million for the quarter compared to $13.8 million in the prior year quarter. Adjusted EBITDA margin was 4.2% compared to 4.4% in the prior year quarter. Total interest expense was $2.9 million for the quarter compared to $2.8 million in the prior year quarter. The increase reflects a higher average daily line of credit balance, of $12.1 million to $65.7 million partially offset by lower average term loan balance and modestly lower floating rates. Net income attributable to HF Foods was $2.6 million for the quarter compared to $1.2 million in the prior year quarter. The improvement was primarily driven by an employee retention credit of $1.8 million which includes interest. IEEPA tariff refund of approximately $1.1 million, and a $1.4 million favorable year over year change in the fair value of our interest rate swap contracts. These items were partially offset by a $1.3 million decrease in income from operations and a $700 thousand year-over-year change in net income attributable to noncontrolling interests. Adjusted net income attributable to HF Foods was $6.4 million for the quarter and essentially flat compared to the prior year quarter. Earnings per share improved to $0.05 compared to $0.02 in the prior year quarter. Adjusted earnings per share was $0.12 for the quarter and flat compared to the prior year quarter. Now on CapEx, We spent approximately $20.3 million for the first 6 months ended June 30, 2026. And I want to give a little color on that. The spend is driven principally by the $12.4 million purchase of our previously leased Chicago distribution center, along with $2.8 million of solar investment, which is expected to lower operating costs, $2.1 million of capacity expansion, and $1.4 million of fleet upgrades. Recurring maintenance expenditures were approximately $1.7 million. On the solar investment, we will benefit from an investment tax credit refund that will reduce our overall investment by 40%. Turning to the balance sheet. After quarter end on July 29, we closed an amendment that refinanced and upsized our credit facility. Our bank group is JPMorgan Chase as administrative agent and the lender together with Fifth Third, and TD Bank, which joined the facility in connection with this transaction. We increased our asset based revolving commitments from $125 million to $140 million. And refinance our existing term loans, which had an outstanding balance approximately $95 million into term loans totaling $125 million. The revolving facility now matures in July 2031, the term loan in July 2036. The transaction gives us meaningful incremental liquidity to fund our growth initiatives for both the Sea Ray acquisition and our ongoing facilities investments. Because the refinancing closed after quarter end, it is not reflected in this quarter's financials. Full terms are available on the Form 8 k we filed on July 31, and I want to thank our banking partners for their commitment in helping us drive the growth of HF Foods. Now to the transaction we announced on July 23. On July 17, we signed a definitive agreement to acquire Sea Ray Foods, This is the first acquisition outside the United States in HF Foods' history. It is the clearest evidence yet of what we mean when we say we are the acquirer of choice in this category. The transaction is expected to close in August 2026 and is the most consequential thing we have done this year. The aggregate based purchase price is CAD 47.9 million, or approximately $35 million with the sellers also eligible for contingent earn out payments tied to specific EBITDA targets over a 2- to 3-year period following the closing. Consideration is a mix of cash and HF Foods common stock which can be reviewed in the Form 8 k we filed announcing the transaction. We expect to close no later than August 31 subject to customary closing conditions and receipt of any required regulatory approvals. Now the economics, which are what makes this acquisition compelling. The base purchase price represents approximately 5 times Sea Ray's baseline adjusted EBITDA of roughly CAD 9.6 million or approximately $7 million US. Sea Ray runs adjusted EBITDA margins in the mid teens against our consolidated adjusted EBITDA margin of 4.2% this quarter So this is a business that is margin-accretive to the platform from day 1. And moves us towards the 4.5 to 5% plus consolidated target we have laid out. We are earning a higher margin business at a mid single digit and that is exactly the discipline we told you we would bring to M&A. Let me close by putting the quarter in a broader context. This is our sixth consecutive quarter of year over year net revenue growth. And at $323.8 million, it is the highest quarterly net revenue in the company's history. On a trailing 12-month basis, we are now at approximately $1.25 billion, and all of that growth has been driven by organic volume increase and better pricing. So we entered the second half with 3 things in place that we did not have a year ago. First, a refinance and upsize credit facility with revolving commitments of $140 million, term loans termed out to 2036, and materially more liquidity to deploy. Second, a signed definitive agreement for our first acquisition outside the United States at an attractive multiple with a margin profile well above our own. And third, a transformation program that is now largely built rather than under construction which lets us shift from implementation to optimization. Purchasing discipline, route warehouse efficiency, cross selling opportunities, and tighter cost control as fuel and other input costs remain elevated. We will stay disciplined on capital deployment and selective on the tuck in opportunities that strengthen the platform. The balance sheet capacity we just created is there to support that and Sea Ray is the first demonstration of what we intend to do with it. With that, I will turn it back to Xi. Xi Lin: Thanks, Paul. Before we move to Q&A, I want to spend a moment on why Sea Ray is such a significant milestone for us. Sea Ray has spent 25 years building its business in Canada, and we are proud to have them join HF Foods. Just as Sea Ray gives us a platform to grow in Canada, Sea Ray has recently established its own operations in the US. Including a planned direct import operation in Los Angeles. And we believe our distribution network, sourcing scale, and West Coast infrastructure can help accelerate that. Sea Ray also brings a customer base that includes retail wholesale, and restaurants. We talk for a long time about expanding our platform beyond the United States. And Sea Ray is the first step in that long-stated strategy. Now our focus turns to executing well. Working closely with the Sea Ray team on a smooth transition, and beginning to act on the cross selling and supply chain opportunities as the deal moves toward closing in the third quarter. Alongside that, we will keep advancing the facilities and system work already underway and we will stay disciplined as we evaluate further opportunities that strengthen the platform. Thank you for your continued support. We look forward to updating you on our progress next quarter. I will now turn it over to the operator for Q&A. Operator: Thank you. We will now conduct a Q&A session. Once again, that is *1 at this time. 1 moment while we poll for the first question. The first question comes from Aaron Grey with Alliance Global Partners. Please proceed. Aaron Grey: Hi, good evening. Thank you very much for the question and congrats on the quarter here. I guess first question for me, just in terms of the Sea Ray acquisition, obviously, adding the geography with Canada, but would love to hear more in terms of some of the depth or scale specifically within seafood category and what opportunities the acquisition will bring for you guys. Thank you. Xi Lin: Yes. Hi, Aaron. it is Xi. Yeah. You were specifically from a customer mix standpoint, we see Sea Ray as a great platform to potentially open up new channels here for us. Historically, for the US market, HF, our business has been focused on independent restaurants. For Sea Ray, independent restaurants in the Vancouver, in the western part of the Canadian market, it is actually a smaller part of their mix. They have a pretty healthy mix of retail and also wholesale business channels that goes into Asian specialty grocery stores. And with the margin that we are seeing, we see that as a huge opportunity for us for the future. So that is 1 thing that, you know, addition to the margin profile, that is very exciting to us. Aaron Grey: Okay. Great. Thanks. Appreciate that. Second question for me, on the gross margin profile, came above our estimates even when we strip out some of the tariff refund benefit that you got. So just as we think about the gross margin going forward, particularly as we layer in Sea Ray, where do you see the gross margin profile evolution as you guys look to offset some of these tariff headwinds and otherwise? Thanks. Xi Lin: Yeah. You know, 1 of the things that we have talked about for the last couple earnings call is we are focusing on how do we expand our gross profit dollar, especially, coming in 2026 the focus has been trying to conquer new market shares through our expansion in the Southeast with newer and higher amount of seafood mix that is coming into the business. So I think, obviously, 1 thing that was not expected in 2026 with the pricing fuel cost. So we expect volume is going to continue to tick up to offset some of the margin and conquest accounts related margin concession that we will be giving. But with Sea Ray, their gross profit margin is north of 20%. So I think, over time, especially in Q4, that is gonna be a nice mix of business coming in. For the fourth quarter of the year for us. Aaron Grey: Okay. Great. Thank you very much for the detail. I will go ahead and jump back in the queue. Operator: The next question comes from Daniel Harriman with Sidoti and Company. Please proceed. Daniel Scott Harriman: Congrats on a great quarter. Just a couple of quick ones for me, kind of following up on the last 1 there. Just curious if you can update us on some of the cross selling initiatives across the Southeast and the Midwest and where you are in that ramp and how we should think about the pace from here. And then regarding operating income, just looking to see when we can expect maybe Charlotte and Atlanta to start showing up in some of the numbers. Thanks so much. Xi Lin: Hi, Daniel. So let's address Southeast first. Right? And, again, you know, Southeast yes, we have enjoyed a little bit of additional capacity here in the first half of the year. 1 thing to note is that our additional freezer capacity likely will not be ready until later in the year or even into 2027. But we have seen a meaningful volume increase with respect to seafood so volume has grown in that category. Charlotte is still going through inspection at the moment. So all the renovation is 100% completed. So, hopefully, within the next week or 2, Charlotte can be operational. And Charlotte itself, specifically, it is more of an efficiency play with us being able to cut our distribution routes for our Great Wall Virginia business that is currently based out of Richmond, Virginia. So probably gonna be in Q4 or so. We just see some DSNA improvement coming from Charlotte. With the Midwest, we are doing some minor capacity improvement. So, again, likely, it is going to be toward the end of 2026 and then 2027 before we see some meaningful capacity expansion opportunity there. Daniel Scott Harriman: that is really helpful. Thanks so much. Operator: The next question comes from William Kirk with Roth Capital. Please proceed. William Joseph Kirk: Hey. This is William Joseph Kirk on for Bill, Thanks for taking the questions. First for me, on traffic. You mentioned previously that takeout strength has offset dine in. Has that trend held, and were there any notable changes in traffic related to the World Cup? In any of your regions or any other drivers of incremental traffic on the quarter? Any color there would be helpful. Thank you. Xi Lin: Yeah. I mean, not specifically to World Cup. Now there is a seasonality to our business, right? I mean, Q2 generally is 1 of our higher kind of foot-traffic volume quarter. And then as you get into Q3, you know, with kids going out of school and summer vacation happening, then the foot traffic typically kind of slowed down a little bit. But we have seen a pretty meaningful kind of improvement on takeout that we have seen, historically in Q2. Offsetting by some continued foot traffic noise that we are seeing on the buffet and dine in restaurants. So nothing too different versus the prior year. it is kind of normal seasonality that we are seeing. In 2026 so far. William Joseph Kirk: And I appreciate that. Second for me, on the EBITDA beat, you mentioned recently being more aggressive pricing wise in some categories to take share, but margins were up sequentially and EBITDA came in higher. Just help us unpack that a little more and where specifically that came from? Thank you. Xi Lin: Yeah. You know, we have been actively going on the offense. right? And historically, we have really benefited from business coming to us just over nearly 3 decades in business. So for the first time, we have been running a lot of promotional campaigns with our West Coast business, working with some key vendors to partner, kind of expand their brand and their awareness in the market. Then specifically in the Southeast, it is a heavy push on seafood. So I think, specifically in Q2, we have seen some meaningful volume gains on the seafood side. Which drove some of the gross profit dollar improvement that is offsetting some of the pricing pressure that we are seeing both because of the rising diesel cost and from a conquest standpoint, So I expect for the rest of the year in 2026, we are still going to be in this kind of conquest mode. Before margin and everything else gets normalized. Probably in 2027 and beyond. William Joseph Kirk: Great. that is it for me. Congrats again on the quarter. Thank you. Operator: At this time, I would like to turn the floor back over to Xi Lin for closing comments. Xi Lin: Again, I want to thank everyone for your continued support of HF Foods. it is an exciting time for us. We continue to execute on our strategy. We look forward to closing the Sea Ray acquisition in the coming weeks. It will be a significant milestone for us. We will update you all on the progress of integration on our next earnings call. Thank you for your time. Thank you. Operator: This does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a great day. Before you buy stock in HF Foods, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and HF Foods wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. HF Foods (HFFG) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Achieved record quarterly net revenue of $323.8 million, driven by organic volume growth and improved pricing in the seafood category. Navigated industry-wide headwinds including softer foot traffic, tariff pressures, and rising fuel costs that impacted adjusted EBITDA margins. Executed a definitive agreement to acquire Sea Ray Foods, marking the company's first international expansion and entry into the Canadian market. Leveraged a unique position as the only scale food service provider in the U.S. Asian specialty market to act as a strategic acquirer of choice. Transitioned the multi-year transformation program from the implementation phase to optimization, focusing on route efficiency and tighter cost controls. Attributed gross margin pressure to incremental tariffs effective since Q3 2025, partially mitigated by IEEPA tariff refunds received during the quarter. Invested $20.3 million in capital expenditures during the first half of 2026, including the purchase of a Chicago distribution center and solar energy projects. Anticipates the Sea Ray acquisition will be accretive to both margins and EPS immediately upon closing, supporting a long-term consolidated adjusted EBITDA margin target of 4.5% to 5% plus. Expects to close the Sea Ray transaction in August 2026, utilizing a newly upsized $140 million revolving credit facility to fund future growth. Plans to utilize Sea Ray's established Canadian platform and its planned Los Angeles direct import operation to accelerate West Coast infrastructure growth. Maintains a 'conquest mode' for the remainder of 2026, prioritizing volume gains in seafood and market share expansion over immediate margin normalization. Projects meaningful capacity expansion benefits in the Midwest and Southeast regions to materialize late in 2026 and into 2027. Refinanced and upsized credit facilities, extending term loan maturities to 2036 to provide liquidity for M&A and facility upgrades. Identified elevated fuel costs as a persistent headwind, contributing to a $1.4 million year-over-year increase in auto and truck expenses. Benefited from one-time items including an $1.8 million employee retention credit and $1.1 million in tariff refunds which bolstered net income. Sea Ray acquisition includes a contingent earn-out structure tied to specific EBITDA targets over a 2- to 3-year post-closing period. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management highlighted that Sea Ray provides access to retail and wholesale channels in Asian specialty grocery stores, diversifying beyond HF Foods' traditional focus on independent restaurants. Sea Ray's gross profit margin is north of 20%, which is expected to improve the consolidated margin profile starting in Q4. The Charlotte facility is expected to be operational within weeks following final inspections, serving as an efficiency play to reduce distribution routes for the Virginia business. Additional freezer capacity in the Southeast and Midwest is not expected to be fully ready until late 2026 or 2027. Management noted that strength in takeout orders has helped offset continued softness in foot traffic at buffet and dine-in restaurant formats. Current traffic patterns reflect normal seasonality, with Q2 typically being a high-volume quarter followed by a summer slowdown. The EBITDA beat was driven by meaningful volume gains in seafood, which generated enough gross profit dollars to offset pricing concessions used to capture market share. The company expects to remain in 'conquest mode' through 2026, with margin normalization anticipated in 2027 and beyond.

This article first appeared on GuruFocus. Net Revenue: Increased 2.8% year-over-year to $323.8 million, a record high for the company. Gross Profit: Essentially flat at $55 million, compared to $55.1 million in the prior year quarter. Gross Profit Margin: Decreased to 17% from 17.5% in the prior year quarter. Adjusted EBITDA: Decreased 2% to $13.6 million, with a margin of 4.2% compared to 4.4% in the prior year quarter. Distribution, Selling, and Administrative (DS&A) Expense: Increased 2.4% to $52.2 million, driven by higher fuel costs of approximately $1.4 million. Net Income: Attributable to HF Foods was $2.6 million, up from $1.2 million in the prior year quarter. Earnings Per Share (EPS): Improved to $0.05, compared to $0.02 in the prior year quarter. Adjusted EPS: Was $0.12, flat compared to the prior year quarter. Capital Expenditures: Approximately $20.3 million for the first six months of 2026. Interest Expense: Totaled $2.9 million for the quarter, compared to $2.8 million in the prior year quarter. Warning! GuruFocus has detected 4 Warning Signs with HFFG. Is HFFG fairly valued? Test your thesis with our free DCF calculator. Release Date: August 10, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. 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. Q: Regarding the Searay acquisition, what depth and scale does it bring to the seafood category, and what opportunities will it create for HF Foods? A: Felix Lin (President and CEO) explained that Searay provides a platform to open new channels, particularly in retail and wholesale, which are a smaller part of HF's current US business focused on independent restaurants. He highlighted Searay's healthy mix of retail and wholesale channels into Asian specialty grocery stores as a huge opportunity, in addition to its attractive margin profile. Q: How should we think about the gross margin profile evolution, especially with the Searay acquisition and ongoing tariff headwinds? A: Felix Lin (President and CEO) stated that the focus is on expanding gross profit dollars through market share gains in the Southeast with a higher seafood mix. He noted that rising fuel costs were an unexpected headwind in 2026, but volume growth is expected to offset margin concessions. He highlighted that Searay's gross profit margin is north of 20%, which will provide a nice mix benefit starting in Q4. Q: Can you update us on the cross-selling initiatives in the Southeast and Midwest, and when will new facilities like Charlotte and Atlanta start contributing to results? A: Felix Lin (President and CEO) said that while additional freezer capacity in the Southeast won't be ready until late 2026 or 2027, they have seen meaningful volume increases in seafood. He noted that the Charlotte facility is fully renovated and awaiting inspection, expecting it to be operational within a week or two. Charlotte is an efficiency play that should improve DS&A in Q4 by cutting distribution routes for the Great Wall Virginia business. In the Midwest, minor capacity improvements are expected to yield meaningful expansion opportunities toward the end of 2026 and into 2027. Q: Has the trend of takeout strength offsetting dine-in traffic held, and were there any notable changes related to the World Cup? A: Felix Lin (President and CEO) confirmed that the trend of takeout strength offsetting dine-in traffic continued, with no specific impact from the World Cup. He noted that Q2 is typically a higher foot traffic quarter, with a slowdown expected in Q3 due to summer vacations. The takeout improvement offset continued softness in buffet and dining restaurants, consistent with normal seasonality. Q: Can you unpack the EBITDA beat, given the mention of more aggressive pricing to take share? A: Felix Lin (President and CEO) explained that the company has been on the offensive, running promotional campaigns with key vendors on the West Coast and pushing seafood heavily in the Southeast. This drove meaningful volume gains in seafood, which offset pricing pressure from rising diesel costs and conquest accounts. He expects the rest of 2026 to remain in "conquest mode" before margins normalize in 2027 and beyond. Q: What are the key financial details and strategic benefits of the Searay acquisition? A: Paul McGarry (Interim CFO) detailed that the aggregate base purchase price is CAD47.9 million (approximately USD35 million), representing roughly 5x Searay's baseline adjusted EBITDA of approximately CAD9.6 million. Searay runs adjusted EBITDA margins in the mid-teens, making the acquisition margin accretive from day one and supporting the consolidated adjusted EBITDA margin target of 4.5% to 5% plus. The transaction is expected to close in August 2026. Q: What drove the increase in DS&A expenses during the quarter? A: Paul McGarry (Interim CFO) stated that DS&A increased $1.2 million or 2.4% to $52.2 million, driven primarily by higher auto and truck expenses reflecting elevated incremental fuel costs of approximately $1.4 million year over year, along with higher insurance and professional service expenses. This was partially offset by lower personnel expenses as a result of transformation initiatives. Q: Can you provide details on the recent refinancing and upsized credit facility? A: Paul McGarry (Interim CFO) explained that on July 29, the company closed an amendment to refinance and upsize its credit facility. The asset-based revolving commitments were increased from $125 million to $140 million, and existing term loans of approximately $95 million were refinanced into term loans totaling $125 million. The revolving facility matures in July 2031 and the term loan in July 2036, providing meaningful incremental liquidity for the Searay acquisition and ongoing facilities investments. Q: What were the main drivers of the increase in net revenue for the quarter? A: Paul McGarry (Interim CFO) reported that net revenue increased 2.8% or $8.9 million to $323.8 million, primarily due to volume growth and improved pricing in seafood, followed by volume growth in commodities, partially offset by price decreases in meat and poultry. Q: What is the breakdown of the significant CapEx spending in the first half of 2026? A: Paul McGarry (Interim CFO) detailed that CapEx was approximately $20.3 million for the first six months, driven principally by the $12.4 million purchase of the previously leased Chicago distribution center, $2.8 million of solar investment (which will benefit from a 40% investment tax credit refund), $2.1 million of capacity expansion, and $1.4 million of fleet upgrades. Recurring maintenance expenditures were approximately $1.7 million. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Interested in Hf Foods Group Inc.? Here are five stocks we like better. Record revenue, pressured profitability: Second-quarter revenue rose 2.8% year over year to $323.8 million, but adjusted EBITDA fell 2% to $13.6 million as tariffs, higher fuel costs and softer dine-in traffic narrowed margins. Net income benefited from one-time items: Net income increased to $2.6 million, helped by employee retention credits, tariff refunds and favorable interest-rate swap valuation, while adjusted net income and adjusted EPS were essentially unchanged. Canadian expansion planned: HF Foods agreed to acquire Searay Foods for approximately $35 million plus potential earn-outs, creating its first Canadian platform and potentially boosting margins and earnings through Searay’s higher-margin seafood business. 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. → MarketBeat Week in Review – 08/03 - 08/07 “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. → Quantum Earnings Week: Winners and Losers Are Finally Emerging 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. → Take-Two’s Q1 Results Leave GTA 6 Bulls Stuck in the Fog of War 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 seafood. The transaction, which management expects to close by Aug. 31 subject to customary conditions and regulatory approvals, would be HF Foods’ first acquisition outside the U.S. The base purchase price is CAD 47.9 million, or approximately $35 million, with sellers also eligible for contingent earn-out payments tied to specific EBITDA targets over two to three years after closing. Consideration will consist of cash and HF Foods common stock. McGarry said the base purchase price represents roughly five times Searay’s baseline adjusted EBITDA of CAD 9.6 million, or approximately $7 million. Searay operates with adjusted EBITDA margins in the mid-teens, compared with HF Foods’ 4.2% margin in the second quarter. Management expects the acquisition to be accretive to margins and earnings per share from closing and to support its long-term consolidated adjusted EBITDA margin target of 4.5% to 5% or more. Searay brings six proprietary brands—Searay Foods, Thai Best, Pinoy’s Best, Smart Fish, Diamond Shrimp and Gold Label—to HF Foods’ seafood category, which accounts for about 36% of the company’s net revenue. Lin said Searay has grown revenue at roughly 15% annually since 2019. Beyond its Canadian footprint, Searay recently established U.S. operations, including a planned direct-import operation in Los Angeles. Lin said HF Foods expects its distribution network, sourcing scale and West Coast infrastructure to help support that effort. Management also sees an opportunity to broaden its customer channels. While HF Foods has historically focused on independent restaurants in the U.S., Lin said Searay has a more diversified mix that includes retail, wholesale and Asian specialty grocery customers. HF Foods spent approximately $20.3 million in capital expenditures during the first six months of 2026. The spending included $12.4 million to purchase its previously leased Chicago distribution center, $2.8 million for solar investments, $2.1 million for capacity expansion and $1.4 million for fleet upgrades. Recurring maintenance spending totaled approximately $1.7 million. The company expects an investment tax credit refund to reduce the overall cost of its solar investment by 40%, McGarry said. After the quarter ended, HF Foods refinanced and expanded its credit facilities. The company increased asset-based revolving commitments to $140 million from $125 million and refinanced approximately $95 million of outstanding term loans into $125 million of term loans. The revolving facility matures in July 2031, while the term loan matures in July 2036. Management said the additional liquidity is intended to support the Searay acquisition, facility investments and potential future tuck-in acquisitions. On operations, Lin said the company is using promotional campaigns and vendor partnerships to pursue market share, particularly in seafood and in the Southeast. He said seafood volume gains in the second quarter helped offset pricing pressure from higher diesel costs and customer-acquisition efforts. Management expects to remain in that “conquest mode” through 2026, with margins and other factors potentially normalizing in 2027 and beyond. Lin said construction work at the company’s Charlotte facility has been completed and the site was awaiting inspection. He expects it could become operational within weeks, with distribution-route efficiencies potentially benefiting distribution, selling and administrative expenses in the fourth quarter. HF Foods Group, Inc, together with its subsidiaries, manufactures, imports and distributes a variety of ethnic and specialty food products primarily for retail and foodservice customers in the United States. The company focuses on value‐added fresh and frozen offerings that cater to growing consumer interest in Hispanic and other global cuisines. Its vertically integrated operations include in‐house manufacturing, procurement of specialty ingredients, and third‐party distribution partnerships. The company's product portfolio spans a broad range of categories, including fresh and frozen tamales, enchiladas, empanadas, tortillas and quesadillas, as well as shelf‐stable salsas, sauces, dips, spreads and snack items. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Hf Foods Group Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Net Revenue increased 2.8% to $323.8 million GAAP Net Income increased 413.9% to $2.6 million Adjusted Net Income increased 0.8% to $6.4 million Adjusted EBITDA decreased 2.0% to $13.6 million LAS VEGAS, Aug. 10, 2026 (GLOBE NEWSWIRE) -- HF Foods Group Inc. (NASDAQ: HFFG) (“HF Foods” or the “Company”), a leading distributor of international foodservice solutions to Asian restaurants and other businesses across the United States, today announced results for the second quarter ended June 30, 2026. Second Quarter 2026 Financial Results ________________(1)   Adjusted EBITDA is defined as net income (loss) before interest expense, interest income, income taxes and depreciation and amortization, further adjusted to exclude certain unusual, non-cash, or non-recurring expenses.(2)   Adjusted net income and adjusted earnings per share are based on net income attributable to HF Foods Group Inc. Management Commentary “Our second quarter results reflect continued momentum in a challenging operating environment, marking our sixth consecutive quarter of year-over-year net revenue growth and the highest quarterly revenue in our history," said Felix Lin, President and Chief Executive Officer of HF Foods. "Most significantly, we took a major step in our long-term growth strategy with our agreement to acquire Searay Foods, a leading Canadian importer and distributor of ethnic and specialty seafood. This transaction marks our first expansion outside the United States and extends our proven M&A playbook into a new geography, bringing a margin-accretive business with six proprietary brands into our growing seafood category. M&A remains a core pillar of our growth strategy, and as the strategic acquirer of choice in our space, we will continue to selectively evaluate opportunities that could benefit from our operational expertise and scale. At the same time, with the foundation of our transformation program largely built, we are hyper-focused on executing against the significant organic growth opportunities ahead, including our continued cross-selling initiatives across the Southeast and Midwest. We remain confident in our long-term strategy and our ability to create sustained value for our shareholders as we enhance our position as the leading nationwide Asian specialty food distributor.” Second Quarter 2026 Results Net revenue was $323.8 million for the second quarter of 2026 compared to $314.9 million in the prior year period, an increase of $8.9 million, or 2.8%. The increase was primarily attributable to volume growth and pricing improvement in Seafood and Commodity, partially offset by price decrease in Meat & Poultry. Gross profit was $55.0 million for the quarter, essentially flat compared to $55.1 million in the prior year period. Gross profit margin decreased to 17.0% compared to 17.5% in the prior year period. Margin was impacted by incremental tariffs incurred that took effect beginning Q3 2025, partially offset by the IEEPA tariff refunds received during the quarter. Distribution, selling and administrative expenses increased by $1.2 million, or 2.4%, compared to the prior year period, primarily due to an increase in auto & truck expense reflecting elevated incremental fuel costs together with higher insurance and professional services expense, partially offset by lower personnel expense. Distribution, selling and administrative expenses as a percentage of net revenue decreased to 16.1% compared to 16.2% in the prior year period. Net income increased to $2.6 million compared to a net income of $0.5 million in the prior-year period. The improvement was primarily driven by other income recognized that relate to employee retention credit of $1.8 million, including interest, the IEEPA tariff refund of approximately $1.1 million, and a positive change in fair value of interest rate swap contracts by $1.4 million compared to 2025. These favorable variances were partially offset by $1.3 million decrease in income from operations. Adjusted EBITDA decreased 2.0% to $13.6 million compared to $13.8 million in the prior year period, which was due to various items noted in the Adjusted EBITDA table included in “Appendix A - Non-GAAP Financial Measures” of this earnings release. Six Months 2026 Results Net revenue was $635.8 million for the six months ended Jun 30, 2026, compared to $613.3 million in the prior year period, an increase of $22.5 million, or 3.7%. The increase was primarily due to volume growth and pricing improvement in Seafood and Commodity, partially offset by price decrease in Meat & Poultry and volume decrease in Asian Specialty. Gross profit slightly decreased by 0.5% to $105.6 million, compared to $106.1 million in the prior year period. Gross profit margin decreased to 16.6% compared to 17.3% in the prior year period. Margin was impacted by incremental tariffs that took effect beginning Q3 2025, partially offset by the IEEPA tariff refunds received during the period. Distribution, selling and administrative expenses increased by $0.9 million, or 0.9% to $101.7 million, compared to the prior year period mainly due to increases in auto & truck and insurance expenses, partially offset by a reduction in personnel and professional services expenses. Distribution, selling and administrative expenses as a percentage of net revenue decreased slightly to 16.0% in 2026 compared to 16.4% in 2025. Net income was $4.0 million compared to net loss of $1.0 million in the prior year period. The improvement was primarily attributable to the recognition of employee retention credit of $1.8 million, including interest, the IEEPA tariff refund of approximately $1.1 million, a gain from the Utah building sale of $1.4 million, and a favorable year-over-year change in fair value of interest rate swap of $3.4 million. These favorable variances were partially offset by a $1.4 million decrease in operating income and a $0.2 million unfavorable change in income taxes. Adjusted EBITDA increased 0.4% to $23.7 million compared to $23.6 million in the prior year period, which was due to various items noted in the Adjusted EBITDA table included in “Appendix A - Non-GAAP Financial Measures” of this earnings release. Cash Flow and Liquidity Cash provided by operating activities was $14.0 million for the six months ended June 30, 2026, compared to cash provided by operating activities of $10.5 million in the prior year period. Net cash provided by operating activities increased by $3.6 million primarily due to higher income, driven by an increase in other income, and favorable changes in accrued expenses. These favorable impacts were partially offset by lower non-cash expense add-backs. As of June 30, 2026, the Company had cash of $18.1 million, checks issued not presented for payment of $5.6 million and access to approximately $39.7 million in additional funds through the $125.0 million line of credit, subject to a borrowing base calculation. The Company has funded working capital and other capital requirements primarily by cash flow from operations and bank loans, including lines of credit. Cash is required to pay purchase costs for inventory, salaries, fuel and trucking expenses, selling expenses, rental expenses, income taxes, other operating expenses and to service debts. Earnings Call and Webcast HF Foods’ management team will host a live conference call to discuss its financial results today at 1:30 p.m. PT (4:30 p.m. ET). The link to the webcast will be available on the “Events” section of the Company’s Investor Relations website at https://investors.hffoodsgroup.com. Those interested in participating in the live call can dial 1-877-407-0752 or 1-201-389-0912. The webcast will be archived and available for replay. About HF Foods Group Inc. HF Foods Group Inc. is a leading marketer and distributor of fresh produce, frozen and dry food, and non-food products to primarily Asian restaurants and other foodservice customers throughout the United States. HF Foods aims to supply the increasing demand for Asian American restaurant cuisine, leveraging its nationwide network of distribution centers and its strong relations with growers and suppliers of fresh, high-quality specialty restaurant food products and supplies in the US and Asia. Headquartered in Las Vegas, Nevada, HF Foods trades on Nasdaq under the symbol “HFFG”. For more information, please visit www.hffoodsgroup.com. Contact: ICR Anna Kate Heller [email protected] Forward-Looking Statements All statements in this news release other than statements of historical facts are, or may be deemed to be, “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and contain our current expectations about our future results. We have attempted to identify any forward-looking statements by using words such as “aims,” “continues,” “expects,” “plans,” “will,” and other similar expressions. Although we believe that the expectations reflected in all of our forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. Such statements are not guarantees of future performance or events and are subject to known and unknown risks and uncertainties that could cause the Company’s actual results, events or financial positions to differ materially from those included within or implied by such forward-looking statements. Such factors include, but are not limited to, risks relating to our ability to consummate our operational transformation plan as anticipated, risks relating to the impact of our operational plan on our sales and efficiencies, risks relating to the impact of demographic trends on demand for the products we distribute, risks related to potential increases in tariff-related costs, risks related to the Company’s ability to complete the proposed acquisition of Searay foods on the anticipated terms and timeline or at all, risks related to the integration of Searay Foods and the realization of anticipated benefits, synergies and margin accretion from the acquisition, risks related to the Company’s expansion into international markets, including Canada, and other risks associated with cross-border operations, statements of assumption underlying any of the foregoing, and other factors including those disclosed under the caption “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025 and other filings with the Securities and Exchange Commission (the “SEC”). Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date made. Except as required by law, we undertake no obligation to disclose any revision to these forward-looking statements. Appendix ANon-GAAP Financial MeasuresSix Months Ended June 30, 2026 and 2025(Unaudited) Discussion of our financial results includes certain non-GAAP financial measures, including EBITDA, Adjusted EBITDA, non-GAAP net income (loss) attributable to HF Foods Group Inc. and non-GAAP EPS (“earnings (loss) per share”), that we believe provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing our financial performance with other companies in the same industry, many of which present similar non-GAAP financial measures to investors. The definitions of EBITDA, Adjusted EBITDA, non-GAAP net income (loss) attributable to HF Foods Group Inc. and non-GAAP EPS may not be the same as similarly titled measures used by other companies in the industry. EBITDA, Adjusted EBITDA, non-GAAP net income (loss) attributable to HF Foods Group Inc. and non-GAAP EPS are not defined under GAAP and are subject to important limitations as analytical tools and should not be considered in isolation or as substitutes for analysis of our financial results as reported under GAAP. We use non-GAAP financial measures to supplement our GAAP financial results. Management uses EBITDA, defined as net income (loss) before interest expense, interest income, income taxes, and depreciation and amortization to measure operating performance. In addition, management uses Adjusted EBITDA, defined as net income (loss) before interest expense, interest income, income taxes, and depreciation and amortization, further adjusted to exclude certain unusual, non-cash, or non-recurring expenses. We believe that Adjusted EBITDA is less susceptible to variances in actual performance resulting from non-recurring expenses, and other non-cash charges, provides useful information for our investors and is more reflective of other factors that affect our operating performance. We believe non-GAAP net income (loss) attributable to HF Foods Group Inc. and non-GAAP EPS are useful measures of operating performance because these measures exclude certain items not reflective of our core operating performance. Non-GAAP net income (loss) attributable to HF Foods Group Inc. is defined as net income (loss) attributable to HF Foods Group Inc. adjusted for amortization of intangibles, change in fair value of interest rate swaps, stock based compensation, transaction related costs, transformational project costs and certain unusual, non-cash, or non-recurring expenses. We believe that non-GAAP net income (loss) attributable to HF Foods Group Inc. and non-GAAP EPS facilitates period-over-period comparisons and provides additional clarity for investors to better evaluate our operating results. We present EBITDA, Adjusted EBITDA, non-GAAP net income (loss) attributable to HF Foods Group Inc. and non-GAAP EPS in order to provide supplemental information that we consider relevant for the readers of our consolidated financial statements included elsewhere in its reports filed with the SEC, including its most recent Annual Report on Form 10-K, and such information is not meant to replace or supersede U.S. GAAP measures. Reconciliations of the non-GAAP financial measures to their most comparable GAAP financial measures are included in the schedules attached to this press release. ________________(1)   Represents costs associated with the launch and continued implementation of strategic projects including supply chain management. improvements and technology infrastructure initiatives.(2)   Includes legal and consulting costs related to various corporate projects and other strategic initiatives. For the six months ended June 30, 2026, it also includes the gain on the sale of the Utah building.(3)   Includes severance and related expenses for the Company’s transition of executive officers and organizational redesign. ________________ (1)    Represents costs associated with the launch and continued implementation of strategic projects including supply chain management improvements and technology infrastructure initiatives. (2)   Includes legal and consulting costs related to various corporate projects and other strategic initiatives. For the six months ended June 30, 2026, it also includes the gain on the sale of Utah building.(3)   Includes severance and related expenses for the Company’s transition of executive officers and organizational redesign.(4)   Represents the income tax impact of non-GAAP adjustments, calculated using a normalized annual effective tax rate of 24% applied to adjusted pre-tax earnings for the second quarters of 2026 and 2025, excluding permanent items.(5)   EPS difference and diluted non-GAAP earnings per share are calculated by dividing our non-GAAP net income attributable to HF Foods by our non-GAAP diluted weighted average number of shares.

HF FOODS GROUP INC. (HFFG) came out with quarterly earnings of $0.12 per share, beating the Zacks Consensus Estimate of $0.06 per share. This compares to earnings of $0.12 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +100.00%. A quarter ago, it was expected that this company would post earnings of $0.06 per share when it actually produced earnings of $0.06, delivering no surprise. Over the last four quarters, the company has surpassed consensus EPS estimates just once. HF FOODS GROUP, which belongs to the Zacks Food - Miscellaneous industry, posted revenues of $323.78 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 1.14%. This compares to year-ago revenues of $314.85 million. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. HF FOODS GROUP shares have lost about 27.4% since the beginning of the year versus the S&P 500's gain of 13.3%. While HF FOODS GROUP has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for HF FOODS GROUP was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.10 on $318.44 million in revenues for the coming quarter and $0.35 on $1.27 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Food - Miscellaneous is currently in the bottom 16% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the same industry, Armanino Foods of Distinction Inc. (AMNF), is yet to report results for the quarter ended June 2026. The results are expected to be released on August 11. This company is expected to post quarterly earnings of $0.15 per share in its upcoming report, which represents no change from the year-ago quarter. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Armanino Foods of Distinction Inc.'s revenues are expected to be $21.2 million, up 6.2% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report HF FOODS GROUP INC. (HFFG) : Free Stock Analysis Report Armanino Foods of Distinction Inc. (AMNF) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Net Revenue increased 4.5% to $312.0 million GAAP Net Income increased 188.6% to $1.4 million Adjusted Net Income decreased 3.6% to $3.4 million Adjusted EBITDA increased 3.8% to $ $10.1 million LAS VEGAS, May 11, 2026 (GLOBE NEWSWIRE) -- HF Foods Group Inc. (NASDAQ: HFFG) (“HF Foods” or the “Company”), a leading distributor of international foodservice solutions to Asian restaurants and other businesses across the United States, today announced results for the first quarter ended March 31, 2026. First Quarter 2026 Financial Results Management Commentary “Our first quarter performance demonstrated continued momentum from our transformation initiatives even as the broader foodservice industry navigated ongoing headwinds,” said Felix Lin, President and Chief Executive Officer of HF Foods. “Our results reflect meaningful progress across our strategic priorities, including the operational benefits we are realizing from our consolidated sales call center structure, continued advancement of our digital infrastructure following our full ERP implementation, and significant milestones in our facilities expansion program. The recent acquisition of our Chicago warehouse and the near-completion of our Charlotte facility position us to unlock substantial cross-selling opportunities in high-growth markets across the Southeast and Midwest. We remain focused on driving operational efficiency, capturing organic growth through network optimization and cross-selling, and selectively pursuing M&A opportunities that strengthen our unmatched competitive position as the leading nationwide distributor in the Asian specialty food category. While near-term cost pressures persist, we are confident in our long-term growth trajectory and our ability to create sustained value for our shareholders as we execute against our strategic vision.” First Quarter 2026 Results Net revenue was $312.0 million for the quarter compared to $298.4 million in the prior year period, an increase of $13.6 million, or 4.5%. The increase was primarily due to volume growth and pricing improvement in Seafood followed by volume growth for Commodity. Gross profit slightly decreased by 0.8% to $50.5 million for the period, compared to $51.0 million in the prior year period. The decrease was primarily due to increased sales in lower margin products like Seafood and an uptick in landed costs. Gross profit margin decreased to 16.2% compared to 17.1% in the prior year period. Distribution, selling and administrative expenses decreased by $0.3 million, or 0.6% to $49.5 million, compared to the prior year period mainly due to increased net revenue and a decrease in professional fees and bad debt expense, partially offset by an increase in auto & truck expenses and depreciation. Distribution, selling and administrative expenses as a percentage of net revenue decreased to 15.9%, compared to 16.7% in the prior year period. Net income was $1.4 million compared to net loss of $1.5 million in the prior year period. The improvement was primarily driven by a $2.0 million favorable change in fair value of interest rate swap contracts and a $1.7 million increase in other income mainly related to sale of a property. These favorable items were partially offset by a decrease in income tax benefit of $0.5 million. Adjusted EBITDA increased 3.8% to $10.1 million compared to $9.8 million in the prior year period, which was due to various items noted in the Adjusted EBITDA table included in “Appendix A - Non-GAAP Financial Measures” of this earnings release. Cash Flow and Liquidity Cash provided by operating activities was $15.3 million for the three months ended March 31, 2026, compared to cash provided by operating activities of $6.9 million in the prior year period. Net cash provided by operating activities increased by $8.3 million primarily due to an increase in non-cash expense add-backs and increases in accounts payable balances, offset by the timing of working capital outlays mainly for inventory purchases and increases in our accounts receivable balances. As of March 31, 2026, the Company had cash of $11.1 million, checks issued not presented for payment of $5.0 million and access to approximately $55.2 million in additional funds through the $125.0 million line of credit, subject to a borrowing base calculation. The Company has funded working capital and other capital requirements primarily by cash flow from operations and bank loans. Cash is required to pay purchase costs for inventory, salaries, fuel and trucking expenses, selling expenses, rental expenses, income taxes, other operating expenses and to service debts. Earnings Call and Webcast HF Foods’ management team will host a live conference call to discuss its financial results today at 1:30 p.m. PT (4:30 p.m. ET). The link to the webcast will be available on the “Events” section of the Company’s Investor Relations website at https://investors.hffoodsgroup.com. Those interested in participating in the live call can dial 1-877-407-0752 or 1-201-389-0912. The webcast will be archived and available for replay. About HF Foods Group Inc. HF Foods Group Inc. is a leading marketer and distributor of fresh produce, frozen and dry food, and non-food products to primarily Asian restaurants and other foodservice customers throughout the United States. HF Foods aims to supply the increasing demand for Asian American restaurant cuisine, leveraging its nationwide network of distribution centers and its strong relations with growers and suppliers of fresh, high-quality specialty restaurant food products and supplies in the US and Asia. Headquartered in Las Vegas, Nevada, HF Foods trades on Nasdaq under the symbol “HFFG”. For more information, please visit www.hffoodsgroup.com. Contact: ICR Anna Kate Heller [email protected] Forward-Looking Statements All statements in this news release other than statements of historical facts are, or may be deemed to be, “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and contain our current expectations about our future results. We have attempted to identify any forward-looking statements by using words such as “aims,” “continues,” “expects,” “plans,” “will,” and other similar expressions. Although we believe that the expectations reflected in all of our forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. Such statements are not guarantees of future performance or events and are subject to known and unknown risks and uncertainties that could cause the Company’s actual results, events or financial positions to differ materially from those included within or implied by such forward-looking statements. Such factors include, but are not limited to, risks relating to our ability to consummate our operational transformation plan as anticipated, risks relating to the impact of our operational plan on our sales and efficiencies, risks relating to the impact of demographic trends on demand for the products we distribute, risks related to potential increases in tariff-related costs, statements of assumption underlying any of the foregoing, and other factors including those disclosed under the caption “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025 and other filings with the Securities and Exchange Commission (the “SEC”). Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date made. Except as required by law, we undertake no obligation to disclose any revision to these forward-looking statements. Appendix A Non-GAAP Financial Measures Three Months Ended March 31, 2026 and 2025 (Unaudited) Discussion of our financial results includes certain non-GAAP financial measures, including EBITDA, Adjusted EBITDA, non-GAAP net income (loss) attributable to HF Foods Group Inc. and non-GAAP EPS (“earnings (loss) per share”), that we believe provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing our financial performance with other companies in the same industry, many of which present similar non-GAAP financial measures to investors. The definitions of EBITDA, Adjusted EBITDA, non-GAAP net income (loss) attributable to HF Foods Group Inc. and non-GAAP EPS may not be the same as similarly titled measures used by other companies in the industry. EBITDA, Adjusted EBITDA, non-GAAP net income (loss) attributable to HF Foods Group Inc. and non-GAAP EPS are not defined under GAAP and are subject to important limitations as analytical tools and should not be considered in isolation or as substitutes for analysis of our financial results as reported under GAAP. We use non-GAAP financial measures to supplement our GAAP financial results. Management uses EBITDA, defined as net income (loss) before interest expense, interest income, income taxes, and depreciation and amortization to measure operating performance. In addition, management uses Adjusted EBITDA, defined as net income (loss) before interest expense, interest income, income taxes, and depreciation and amortization, further adjusted to exclude certain unusual, non-cash, or non-recurring expenses. We believe that Adjusted EBITDA is less susceptible to variances in actual performance resulting from non-recurring expenses, and other non-cash charges, provides useful information for our investors and is more reflective of other factors that affect our operating performance. We believe non-GAAP net income (loss) attributable to HF Foods Group Inc. and non-GAAP EPS are useful measures of operating performance because these measures exclude certain items not reflective of our core operating performance. Non-GAAP net income (loss) attributable to HF Foods Group Inc. is defined as net income (loss) attributable to HF Foods Group Inc. adjusted for amortization of intangibles, change in fair value of interest rate swaps, stock based compensation, transaction related costs, transformational project costs and certain unusual, non-cash, or non-recurring expenses. We believe that non-GAAP net income (loss) attributable to HF Foods Group Inc. and non-GAAP EPS facilitates period-over-period comparisons and provides additional clarity for investors to better evaluate our operating results. We present EBITDA, Adjusted EBITDA, non-GAAP net income (loss) attributable to HF Foods Group Inc. and non-GAAP EPS in order to provide supplemental information that we consider relevant for the readers of our consolidated financial statements included elsewhere in its reports filed with the SEC, including its most recent Annual Report on Form 10-K, and such information is not meant to replace or supersede U.S. GAAP measures. Reconciliations of the non-GAAP financial measures to their most comparable GAAP financial measures are included in the schedules attached to this press release. HF FOODS GROUP INC. AND SUBSIDIARIES RECONCILIATION OF NET INCOME (LOSS) ATTRIBUTABLE TO HF FOODS GROUP INC. TO NON-GAAP NET INCOME AND NON-GAAP EPS ATTRIBUTABLE TO HF FOODS GROUP INC. (In thousands, except per share amounts) (Unaudited) The following tables present our non-GAAP net income (loss) and non-GAAP EPS for the three months ended March 31, 2026 and 2025 respectively, as well as reconciliations of each measure to their nearest GAAP equivalents:

HF FOODS GROUP INC. (HFFG) came out with quarterly earnings of $0.06 per share, in line with the Zacks Consensus Estimate . This compares to earnings of $0.07 per share a year ago. These figures are adjusted for non-recurring items. A quarter ago, it was expected that this company would post earnings of $0.1 per share when it actually produced earnings of $0.05, delivering a surprise of -50%. Over the last four quarters, the company has surpassed consensus EPS estimates just once. HF FOODS GROUP, which belongs to the Zacks Food - Miscellaneous industry, posted revenues of $312 million for the quarter ended March 2026, surpassing the Zacks Consensus Estimate by 1.32%. This compares to year-ago revenues of $298.43 million. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. HF FOODS GROUP shares have lost about 12.1% since the beginning of the year versus the S&P 500's gain of 8.1%. While HF FOODS GROUP has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for HF FOODS GROUP was unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #4 (Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.08 on $325.26 million in revenues for the coming quarter and $0.35 on $1.27 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Food - Miscellaneous is currently in the bottom 16% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. United Natural Foods (UNFI), another stock in the same industry, has yet to report results for the quarter ended April 2026. This organic and specialty foods distributor is expected to post quarterly earnings of $0.81 per share in its upcoming report, which represents a year-over-year change of +84.1%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. United Natural Foods' revenues are expected to be $7.88 billion, down 2.2% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report HF FOODS GROUP INC. (HFFG) : Free Stock Analysis Report United Natural Foods, Inc. (UNFI) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Interested in Hf Foods Group Inc.? Here are five stocks we like better. HF Foods Group posted Q1 revenue of $312 million, up 4.5% year over year, and swung to a net profit of $1.2 million from a $1.6 million loss as volume growth and improved seafood pricing helped offset pressure. Margins were under pressure, with gross margin slipping to 16.2% from 17.1% amid a higher mix of lower-margin seafood products, tariffs, and rising fuel costs; management said these cost headwinds may persist into the second or third quarter. The company is pushing its transformation and expansion plans, including sales-team consolidation, ERP optimization, and facility investments in Chicago, Charlotte, and Atlanta to support cross-selling, efficiency gains, and future organic growth. Hf Foods Group (NASDAQ:HFFG) reported higher first-quarter revenue and improved profitability as management said volume growth, cost controls and operational changes helped offset pressure from product mix, tariffs and rising fuel costs. The Asian specialty food distributor posted net revenue of $312 million for the quarter ended March 31, 2026, up 4.5% from $298.4 million in the prior-year period. President and Chief Executive Officer Felix Lin said the increase was driven by higher volume, while Chief Financial Officer Paul McGarry said improved seafood pricing and commodity volume growth also contributed. → Beyond NVIDIA: Picks-and-Shovels AI Plays with Strong Momentum Gross profit declined slightly to $50.5 million from $51 million a year earlier, while gross margin fell to 16.2% from 17.1%. Management attributed the margin decline primarily to a higher mix of lower-margin seafood products and increased landed costs. Adjusted EBITDA rose 3.8% to $10.1 million from $9.8 million. Net income attributable to HF Foods was $1.2 million, compared with a net loss of $1.6 million in the year-ago quarter. Earnings per share improved to $0.02 from a loss of $0.03 per share. Adjusted earnings per share declined to $0.06 from $0.07. → 3 Ways to Target the Resources Powering AI and Data Centers Lin said broader foodservice industry headwinds that emerged in 2025, including tariff pressure and lower foot traffic, continued into the first quarter. He said rising fuel prices added pressure during the period. “Based on current trends, we do expect some short-term pressure due to increased cost of goods sold and outbound distribution costs related to rising fuel costs, which we’re taking action to mitigate,” Lin said. → MercadoLibre Boldly Invests in Growth: Discount Deepens In response to an analyst question about gross margin, Lin said elevated costs are likely to continue for “a little while,” including into the second quarter and possibly the third quarter of 2026. He noted that HF Foods operates largely in a spot market and said year-over-year comparisons are affected by lower-cost inventory the company held in the prior year as tariffs were implemented. Lin said the company is working to offset cost pressure through measures including lower occupancy expense from converting a leased facility to company ownership, reduced professional fees and changes to sales operations. McGarry said distribution, selling and administrative expenses decreased by $0.3 million to $49.5 million, primarily due to lower professional fees and bad debt expense, partially offset by higher auto and truck expenses and depreciation. DS&A expenses declined as a percentage of revenue to 15.9% from 16.7%. Management highlighted progress on HF Foods’ long-term transformation plan, including sales operations, digital infrastructure and facility upgrades. Lin said the company consolidated two sales call center operations into one unified team in late December 2025. He said the move is designed to improve control over the sales process, customer service and pricing consistency across the company’s network, while still preserving customer relationships through knowledge of customer businesses, language and product needs. Lin said the company is already seeing efficiency benefits from lower sales commission-related SG&A spending as the new team adapts. With the company’s ERP implementation completed, Lin said HF Foods is now focused on system and data optimization. He said the new system should support purchasing efficiencies by consolidating buying across distribution centers and improve operations through enhanced route optimization. The company also recategorized a significant number of SKUs as part of the ERP implementation. Lin said the next stage of the company’s digital transformation is the development of a customized customer portal intended to improve transactional visibility and efficiency. HF Foods also provided updates on several facility projects tied to its organic growth and cross-selling strategy. The company completed the acquisition of its previously leased Chicago facility and is expanding cooler and ambient capacity there. Lin said the Charlotte facility is “largely ready” but still awaiting final local government permits. The company expects Charlotte to be fully operational in late second quarter or early third quarter of 2026, which Lin said would shorten seafood distribution routes in the Southeast. HF Foods is also beginning phase two of its Atlanta freezer expansion plan. Lin said the project will nearly double cold storage capacity in that market from 10,000 square feet to 20,000 square feet, with readiness expected by the end of 2026. Lin described the Chicago, Charlotte and Atlanta upgrades as cornerstones of the company’s cross-selling strategy in the Southeast and Midwest. He said those regions represent “several hundred million” dollars of organic growth opportunity as the company expands capacity. During the question-and-answer session, Lin said the Southeast historically has not had significant frozen seafood sales for HF Foods, despite frozen seafood representing the company’s largest product category at just over $400 million in annual revenue. He said shortened routes and improved distribution efficiency should give HF Foods leverage over smaller competitors and support better pricing power. Lin said the Atlanta facility has already opened “a couple” dedicated seafood routes to serve existing customers, while Charlotte is expected to benefit the company in the second half of the year once permits are finalized. Management reiterated that mergers and acquisitions remain a core part of HF Foods’ growth strategy. Lin said the company views itself as the only scaled foodservice provider in the U.S. Asian specialty market and as a “strategic acquirer of choice” in the space. Lin said HF Foods is focused on acquisitions that expand its geographic footprint, capture operating synergies, broaden its customer base and enhance product and service capabilities. Asked whether higher fuel prices and elevated costs are affecting smaller competitors, Lin said the company has seen inbound M&A calls increase over the past several months. He said smaller players are being squeezed by elevated inventory costs and fuel-related operating costs, which could create opportunities for HF Foods. “Over time, we do see that as an advantage,” Lin said, comparing the environment to the pandemic period, when pressure on family-owned businesses led some to seek exits. Lin said first-quarter foot traffic was generally consistent with the second half of 2025, with lower traffic largely limited to some larger buffet restaurants served by the company. He said HF Foods can pass through a portion of higher fuel costs in certain markets where it has substantial market share, such as Salt Lake, but has more limited ability to do so in more competitive markets. Looking ahead, Lin said HF Foods remains committed to its transformation initiatives and long-term strategic objectives despite short-term uncertainty. McGarry said the company’s focus is now on turning completed transformation work into operational gains, including purchasing discipline, route and warehouse efficiency and tighter cost control. “We remain extremely confident in our long-term growth strategy and are committed to our capital investment plans as we continue our growth momentum in 2026 and beyond,” Lin said. HF Foods Group, Inc, together with its subsidiaries, manufactures, imports and distributes a variety of ethnic and specialty food products primarily for retail and foodservice customers in the United States. The company focuses on value‐added fresh and frozen offerings that cater to growing consumer interest in Hispanic and other global cuisines. Its vertically integrated operations include in‐house manufacturing, procurement of specialty ingredients, and third‐party distribution partnerships. The company's product portfolio spans a broad range of categories, including fresh and frozen tamales, enchiladas, empanadas, tortillas and quesadillas, as well as shelf‐stable salsas, sauces, dips, spreads and snack items. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Hf Foods Group Q1 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for May 2026.

This article first appeared on GuruFocus. Release Date: May 11, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Net revenue increased by 4.5% year-over-year to $312 million, driven by higher volume and improved pricing in seafood. Adjusted EBITDA rose by 3.8% year-over-year to $10.1 million, indicating improved operational efficiency. The company successfully consolidated two sales call centers into one, enhancing customer service and reducing DS&A expenses. HF Foods Group Inc (NASDAQ:HFFG) completed the acquisition of a previously leased facility in Chicago, expanding cooler and ambient capacity. The company is actively pursuing M&A opportunities, leveraging its position as the largest player in the Asian specialty market in the U.S. Gross profit decreased slightly to $50.5 million due to increased sales in lower-margin products like seafood. Gross profit margin fell to 16.2% from 17.1% in the prior year, impacted by higher landed costs. Rising fuel prices are expected to exert short-term pressure on cost of goods sold and outbound distribution costs. The Charlotte facility is still pending final permits, delaying its full operational status. Adjusted net income attributable to HF Foods decreased slightly to $3.4 million from $3.5 million in the prior-year quarter. Warning! GuruFocus has detected 4 Warning Signs with HFFG. Is HFFG fairly valued? Test your thesis with our free DCF calculator. Q: How do you anticipate the impact of rising fuel prices on gross margins, and what efficiency gains might offset these costs? A: Felix Lynn, CEO: In the short term, elevated costs will persist, but we're implementing measures to mitigate these impacts. Our ERP program and operational efficiencies, such as converting leased facilities to owned ones, are expected to improve our cost structure and maintain bottom-line improvements. Q: Are rising fuel prices affecting smaller operators, and how does this impact your M&A strategy? A: Felix Lynn, CEO: Smaller operators are indeed feeling the pressure from increased costs, which is leading to more M&A opportunities for us. We're seeing an uptick in inbound M&A inquiries, similar to the pandemic period, as smaller family-owned businesses look for exits. Q: Can you elaborate on the long-term expectations for gross margins and DS&A expenses with the new Charlotte facility and Atlanta expansion? A: Felix Lynn, CEO: The Charlotte and Atlanta facilities are central to our cross-selling strategy, particularly in frozen seafood. These facilities will enhance distribution efficiency and pricing power, benefiting our margins. We're already seeing positive impacts from dedicated seafood routes in Atlanta. Q: Have higher fuel prices led to changes in customer foot traffic or behavior? A: Felix Lynn, CEO: We haven't seen significant changes in foot traffic due to fuel prices. Traffic remains consistent with late 2025 levels, though larger buffet restaurants still experience lower traffic. We adjust pricing based on market share and competitive pressure in different regions. Q: What progress has been made in refining the sales force, and how will it impact account penetration? A: Felix Lynn, CEO: The sales force stabilization is largely complete. The focus now is on training for new product SKUs, particularly in seafood cross-selling in the Southeast. We expect significant volume growth in the second half of the year as the sales team adapts. For the complete transcript of the earnings call, please refer to the full earnings call transcript.