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Investing.com -- Hf Foods Group Inc (NASDAQ:HFFG) shares were 2.3% higher in after-hours trading Monday as the company posted stronger-than-expected second-quarter earnings. The foodservice distributor topped Wall Street forecasts on both the top and bottom lines, highlighting operational progress and higher volumes across key categories.
HF Foods CEO Felix Lin called the quarter "historic" in exclusive comments made to Investing.com, citing record net revenues and gross profit. "These results demonstrate our continued strength and leadership within the specialty and international food service industry as well as our commitment to growth as a business with a 30+ year heritage," he said.
The company reported adjusted earnings per share of $0.12, quadrupling last year’s result and notably ahead of analysts’ $0.03 consensus estimate. Revenue rose 4.1% year-over-year to $314.9 million, above the projected $309.39 million and driven by improvements in Meat & Poultry and Seafood.
Gross profit increased 5.1% to $55.1 million, with gross margin expanding modestly by 13 basis points to 17.5%. Net income more than doubled to $0.5 million from $0.2 million in the corresponding period a year ago, benefiting from improved operational leverage.
Adjusted EBITDA climbed 31.1% to $13.8 million, bolstered by efficiencies tied to a recent ERP implementation and lower professional fees. Distribution, selling and administrative expenses as a percentage of net revenue eased slightly to 16.2%, reflecting tight cost controls and revenue growth.
"We continue to execute with discipline against our strategic initiatives and our growth strategy, and as we look ahead, this year is a year of strategic investment for the company," Lin continued in remarks to Investing.com. "The investments we are making in our facilities, digital infrastructure and operations now will help us fortify our strong foundation for continued enhancement in the years to come."
HF Foods has long been a key player in the specialty food distribution market, serving a niche segment of Asian restaurants across the U.S. The company completed its enterprise resource planning system rollout in the quarter, which is expected to improve efficiency across its national platform.
Investor sentiment turned positive following the results, with shares moving higher in after-hours trading. With a $15.7 million cash balance and access to nearly $58 million in additional liquidity, HF Foods’ strong quarter, financial footing, and upbeat outlook appear to be resonating with investors.