High Liner Foods Incorporated

High Liner Foods reported Q2 revenue of $269.3 million, up $29.7 million or 12.4% year over year, on sales volume of 57 million pounds, up 4% from 54.8 million pounds. Gross profit was $50.1 million, down $3.2 million or 6%, and gross margin was 18.6% versus 22.3% in Q2 2025, pressured by a $10.1 million inventory loss from a third-party warehouse fire, though that was partly offset by $7.9 million of AIIFA tariff recovery. Adjusted EBITDA increased $5.1 million or 20.3% to $30.2 million, adjusted net income rose to $12.7 million, and adjusted diluted EPS improved to $0.44 from $0.38. Reported net income fell to $5.1 million and diluted EPS declined to $0.18 from $0.28. For the balance of the year, management expects low single-digit volume growth for the full year, gross margin in the back half to be just shy of 20%, net debt/adjusted EBITDA to improve to slightly below 3x by year-end, and CapEx to remain in its historical $20 million to $25 million range.

Paul Jewer said Q2 showed the business is resilient and that actions on pricing, promotions, supply chain, and cost discipline are starting to work. He emphasized that demand stayed solid even as the company raised prices and moderated promotions, and he pointed to the tariff refunds as clearer evidence of how much tariffs had hurt margins earlier in 2025 and 2026. His tone was cautiously optimistic, saying the company is more positive on the full-year outlook after Q2 and expects benefits from these actions to become more evident in the second half.

Kimberly Stephens walked through the hard numbers: revenue of $269.3 million, gross profit of $50.1 million, gross margin of 18.6%, adjusted EBITDA of $30.2 million, adjusted EPS of $0.44, and reported EPS of $0.18. She highlighted the $10.1 million inventory-related loss from the warehouse fire, $7.9 million of AIIFA tariff recovery recognized in Q2, and another $27.9 million of tariff recovery received after quarter-end that will hit Q3 results. She also noted operating cash flow was an outflow of $3 million, net debt rose to $335.8 million, net debt to adjusted EBITDA was 3.6x, and she expects that ratio to finish slightly below the company’s 3x long-term target by year-end.

Analysts focused heavily on tariffs, asking how much of the recovery was already in the numbers and what the remaining tariff headwind looks like. Management said the business has moved from the higher AIIFA tariffs to a more manageable 10% to 12.5% range on most imports, though tariffs still remain a headwind and pricing is still being worked through. Questions also centered on volume elasticity after pricing, inventory build, gross margin recovery, and capex; management said volumes held up better than expected, inventory was built partly due to inflation and opportunistic buying, and gross margin in the second half should be just shy of 20%.