HF Foods Group Inc. Reports Slight Revenue Increase and Net Loss in Q1 2025

HF Foods Group Inc. reported a slight increase in net revenue for the first quarter of 2025, reaching $298.4 million, up from $295.7 million in the same period of 2024. This growth of approximately 0.9% was attributed to volume increases and improved pricing in key product categories such as Commodity, Meat & Poultry, and Seafood, despite a decrease in volume in other categories. The company's gross profit also saw a modest rise, totaling $51.0 million compared to $50.4 million a year earlier, maintaining a gross profit margin of 17.1%.

However, HF Foods experienced a net loss of $1.5 million for the quarter, a significant increase from the $0.6 million loss reported in the prior year. This increase in loss was primarily driven by a $3.2 million unfavorable change in the fair value of interest rate swap contracts, which was partially offset by improved operational performance. The company’s adjusted EBITDA improved to $9.8 million, up from $8.7 million in the previous year, indicating a positive trend in operational efficiency.

In terms of operational developments, HF Foods has been focusing on a comprehensive transformation plan aimed at enhancing growth and cost savings. Key initiatives include centralized purchasing, fleet and transportation improvements, digital transformation through a new ERP system, and facility upgrades. These efforts are expected to streamline operations and improve service delivery to the company's customer base, which primarily consists of Asian restaurants across the United States.

The company’s balance sheet as of March 31, 2025, showed total assets of $581.9 million, an increase from $550.0 million at the end of 2024. Current liabilities also rose to $157.6 million from $145.2 million, driven by increases in accounts payable and obligations under finance leases. HF Foods maintained a cash balance of $16.1 million and had access to approximately $60.0 million in additional funds through its revolving credit facility, indicating a stable liquidity position.

Looking ahead, HF Foods remains optimistic about its growth prospects, driven by the increasing demand for Asian cuisine in the U.S. market. The company plans to continue its strategic initiatives to enhance operational efficiency and expand its distribution network. However, management acknowledges potential risks, including market conditions and competition, which could impact future performance. The company is committed to addressing its material weaknesses in internal controls and improving its financial reporting processes as part of its ongoing efforts to strengthen its operational framework.