HF Foods 2025 Q3 Earnings Narrowed Net Loss by 77.2% Despite Revenue Growth

HF Foods Group Inc. (NASDAQ:HFFG) reported mixed third-quarter 2025 results, with revenue exceeding expectations but non-GAAP EPS falling short. The company narrowed its net loss to $0.9 million, a 77.2% improvement year-over-year, while revenue rose 2.9% to $307 million. CEO Felix Lin highlighted strategic initiatives and operational efficiency as key drivers, though macroeconomic challenges and tariff pressures remain.

Revenue

HF Foods’ total revenue increased to $306.98 million in Q3 2025, up 2.9% from $298.39 million in the prior-year period. The growth was primarily driven by volume increases and improved pricing in the Meat & Poultry and Seafood segments. Gross profit remained stable at $50.4 million, with a margin of 16.4%, reflecting the company’s ability to manage costs despite a higher proportion of lower-margin seafood sales.

Earnings/Net Income

The company significantly narrowed its net loss to $0.9 million in Q3 2025, compared to $3.84 million in the same period last year. Non-GAAP EPS improved to $0.08, though this missed the forecasted $0.09. Adjusted EBITDA surged 41.5% to $11.7 million, demonstrating stronger operational leverage. While the EPS miss indicates ongoing profitability challenges, the net loss reduction underscores progress in cost control.

Price Action

Post-earnings, HF Foods’ stock edged down 2.09% in the latest trading day but gained 8.84% over the most recent full week. Month-to-date, the stock has declined 8.59%, reflecting mixed investor sentiment. The 30-day holding strategy post-earnings yielded a 5.5% return, slightly outperforming the SPY ETF’s 5.2%, though its CAGR of 2.8% lagged the market’s 4.1%. With a beta of 1.2, the stock exhibited higher volatility, though strong performance in May 2023 offered temporary optimism.

CEO Commentary

Felix Lin emphasized the company’s “solid financial performance” in Q3, driven by transformation initiatives and operational discipline. He highlighted growth in Meat & Poultry and Seafood, while acknowledging macro challenges. Strategic priorities include evaluating M&A opportunities, expanding the geographical footprint, and investing in infrastructure. Lin expressed confidence in the long-term plan to drive sustained growth and shareholder value.

Guidance

HF Foods expects Q4 results to mirror Q3, with no specific financial guidance provided. The company reiterated its focus on operational efficiency, M&A, and infrastructure investments. Risks include macroeconomic pressures, tariff-related costs, and shifting consumer behaviors.

Additional News

HF Foods announced a $100 million at-the-market equity offering, signaling confidence in its capital structure. The company acquired a Chicago warehouse to enhance operational efficiency and is expanding cold storage capacity in Atlanta, doubling regional capacity to boost frozen seafood sales. Interim CFO Paul McGarry joined the leadership team, succeeding prior executives. Additionally, the company deployed a new ERP system across all locations, streamlining operations and unlocking centralized purchasing efficiencies.

M&A and Strategic Expansion: HF Foods is actively pursuing M&A opportunities to strengthen its position as the leading Asian specialty food service provider in the U.S. Recent infrastructure investments, including the Atlanta warehouse expansion and Chicago acquisition, aim to enhance cross-selling capabilities and geographic reach. The company also emphasized digital transformation milestones, such as the unified ERP platform, to improve operational visibility and efficiency.

Leadership and Operational Shifts: The appointment of Paul McGarry as interim CFO marks a strategic leadership transition. Management also announced a sales force restructuring, consolidating operations to reduce costs and improve customer service. These changes align with broader transformation initiatives to optimize the supply chain and distribution network.

Market Position and Challenges: HF Foods remains focused on leveraging its leadership in Asian specialty distribution, despite industry-wide challenges like tariff pressures and lower foot traffic. The company’s emphasis on operational discipline and infrastructure investments aims to mitigate these risks while capitalizing on long-term growth opportunities.