HF Foods Group Inc.

For Q2 2026, net revenue increased 2.8% year over year to $323.8 million from $314.9 million, a company record. Gross profit was $55.0 million versus $55.1 million a year ago, and gross margin was 17.0% compared with 17.5%. Adjusted EBITDA was $13.6 million, down 2% year over year from $13.8 million, with adjusted EBITDA margin at 4.2% versus 4.4%. EPS improved to $0.05 from $0.02, while adjusted EPS was $0.12 and flat year over year. For the Sea Ray deal, management said the base purchase price is CAD 47.9 million, or about $35 million, which is about 5x Sea Ray's baseline adjusted EBITDA of roughly CAD 9.6 million, or about $7 million US. They also said Sea Ray's adjusted EBITDA margins are in the mid teens, and HF Foods reiterated a 4.5% to 5%+ consolidated adjusted EBITDA margin target over the next 3 to 5 years. No formal quarterly or full-year revenue/EPS guidance was given.

Xi Lin framed the quarter as proof that HF Foods is building momentum despite tariffs, softer traffic, and rising fuel costs. He emphasized the company's transformation efforts in sales operations, digital infrastructure, and facilities, and said Sea Ray is a major milestone because it expands HF Foods into Canada and broadens the platform beyond the U.S. His tone was optimistic and strategic, repeatedly stressing discipline in M&A and confidence that the company is positioned to capture more share in the Asian specialty market.

Paul McGarry focused on the drivers behind the quarter and the balance sheet setup for growth. He highlighted the 2.8% revenue increase, flat gross profit, lower gross margin from tariffs, and DS&A of $52.2 million, up 2.4% mainly because of about $1.4 million of higher fuel-related auto and truck expense. He also noted $20.3 million of first-half capex, including the Chicago distribution center purchase, solar investment, capacity expansion, and fleet upgrades, and said the post-quarter refinancing increased revolver commitments to $140 million and extended maturities, providing more liquidity for Sea Ray and other investments.

Analysts asked how Sea Ray would deepen the seafood business and what cross-selling opportunities it could open; management said Sea Ray adds retail and wholesale channels, especially into Asian specialty grocery stores, and that its gross margin profile is north of 20%, which should be accretive over time. Questions also focused on gross margin and tariff/fuel headwinds; Xi said the company is prioritizing gross profit dollars, expects volume growth to help offset concessions, and sees Sea Ray's higher-margin mix helping later in the year. On operating initiatives, management said Charlotte is still under inspection but could be operational within one to two weeks, with visible DS&A benefit likely in Q4, while Midwest capacity improvements are more of a late-2026 to 2027 story.