HF Foods Group Inc.

What they do

HF Foods operates 16 distribution centers and four cross-docks, with a fleet of over 400 vehicles, covering 46 states and approximately 95% of the contiguous U.S. It serves about 15,000 customer locations with over 2,000 products, including meat, poultry, produce, frozen seafood, and packaging. The company leverages deep cultural and language expertise in the Asian restaurant community, supported by nearly 1,000 employees and a centralized outsourced call center in China.

Revenue drivers

• Seafood — Frozen seafood and specialty seafood products are a key growth category, supported by the 2022 Sealand acquisition and the planned acquisition of Searay Foods. Second-quarter 2026 revenue growth was driven by volume and pricing in Seafood.
• Commodity — Commodity products contributed to second-quarter 2026 revenue growth, with centralized purchasing program expansion targeting commodities for margin improvement.
• Meat and Poultry — A major product category, but second-quarter 2026 saw price decreases in Meat and Poultry partially offsetting gains in Seafood and Commodity.
• Fresh Produce — A core offering for Asian restaurants, distributed through the national platform, but no specific revenue split was provided.

Recent performance

For Q2 2026 (June 30, 2026), net revenue increased 2.8% to $323.8 million from $314.9 million a year earlier, the sixth consecutive quarter of year-over-year revenue growth and the highest quarterly revenue in company history. Gross profit was essentially flat at $55.0 million, with gross margin down to 17.0% from 17.5%, impacted by incremental tariffs partially offset by IEEPA tariff refunds. GAAP net income rose to $2.6 million from $0.5 million, helped by a $1.8 million employee retention credit and a $1.1 million tariff refund. For the first half of 2026, net revenue was $635.8 million, up $22.5 million, and net income was $4.0 million. Annual net income has been negative for the past two years, with a net loss of $38.8 million in 2025 and $48.5 million in 2024.

Strategy

Management is executing a transformation plan launched in 2024, focused on four areas: centralized purchasing (rolling out program to commodities after successful seafood and poultry rollouts), fleet and transportation (national maintenance program, fleet replacement for 50% of vehicles, fuel savings initiative, outsourcing inbound freight), digital transformation (completed ERP implementation across all centers), and facility upgrades. M&A remains a core pillar, highlighted by the agreement to acquire Searay Foods, a Canadian importer and distributor, marking the first expansion outside the U.S. The company also aims to selectively broaden into other ethnic and specialty foodservice segments while continuing cross-selling in the Southeast and Midwest.

Risks

• Low-margin industry — The foodservice distribution industry is characterized by high inventory turnover and low profit margins, and inflation or deflation can hit profitability if price increases can't be passed on.
• Trade policy and tariffs — Changes in U.S. tariff and import regulations, including tariffs effective since Q3 2025, have already impacted margins; the company is subject to further policy shifts.
• Fuel and transportation costs — Higher fuel costs and vehicle expenses were cited as a drag on operating expenses in Q2 2026, and fleet replacement and maintenance programs may not fully offset future increases.
• Integration risk from acquisitions — The company's growth strategy relies on M&A, including the pending Searay Foods acquisition, which carries integration, operational, and geographic expansion risks.

Outlook

Management expects continued organic growth, citing cross-selling opportunities in the Southeast and Midwest. The transformation plan is largely built, and management is focused on executing against organic opportunities. The Searay Foods acquisition is expected to be margin-accretive and expand the seafood category with proprietary brands. Forward-looking statements caution that actual results may differ materially due to the risks outlined in filings.