High Liner Foods Incorporated

Second-quarter revenue was $269.3 million, up 12.4% from $239.6 million a year ago. Sales volume increased 4% to 57 million pounds from 54.8 million pounds. Gross profit was $50.1 million, down 6%, and gross margin was 18.6% versus 22.3% in the prior year. Adjusted EBITDA rose 20.3% to $30.2 million from $25.1 million, while reported net income fell 40% to $5.1 million and diluted EPS fell to $0.18 from $0.28; adjusted diluted EPS rose to $0.44 from $0.38. Net cash from operating activities was an outflow of $3 million versus an inflow of $15.6 million last year, and net debt increased to $335.8 million from $322 million, with net debt to adjusted EBITDA at 3.6x. Management said full-year volume growth is expected to be low single digit, gross margin in the back half should be just shy of 20%, and leverage should improve to slightly below the company’s long-term 3x target by fiscal year-end.

Paul Jewer framed the quarter as an encouraging step forward, emphasizing that demand stayed resilient, retail momentum held up, and adjusted EBITDA improved even after tariff pressure. He said pricing, more disciplined promotions, and better supply-chain execution are starting to show through, while also noting that tariffs and inflation still remain major headwinds. His tone was constructive and cautiously optimistic, saying the company is “incrementally more positive” on the full-year outlook after Q2 and expects benefits from its actions to become more visible in the second half.

Kimberly Stephens highlighted the hard numbers behind the quarter: volume up 4% to 57 million pounds, revenue up 12.4% to $269.3 million, gross profit down to $50.1 million, and adjusted EBITDA up to $30.2 million. She pointed to $10.1 million of inventory-related losses from a third-party warehouse fire, offset in part by $7.9 million of AIIFA tariff recovery recognized in Q2, plus $5.7 million of incurred AIIFA-related tariffs in cost of sales. She also noted $27.9 million of additional tariff recovery approved after quarter-end, said net debt was $335.8 million with leverage at 3.6x, and expects leverage to move slightly below 3x by the end of fiscal 26.

Analysts focused heavily on tariffs, asking how much of the recoveries should be treated as normalized earnings and what the ongoing tariff headwind looks like. Management said the business moved from the higher AIIFA tariffs to a more manageable environment of roughly 10% to 12.5% on most imported seafood, with some countries still at 0%, and that volume has held up better than expected despite price increases. Questions also covered inventory build, gross margin recovery, and second-half volume; management said the inventory build was partly inflation-related and partly opportunistic buying, volume should stay low-single-digit for the full year, and gross margin in the back half should be just shy of 20%.