Investors might want to bet on HF FOODS GROUP INC. (HFFG) , as earnings estimates for this company have been showing solid improvement lately. The stock has already gained solid short-term price momentum, and this trend might continue with its still improving earnings outlook.The upward trend in estimate revisions for this company reflects growing optimism of analysts on its earnings prospects, which should get reflected in its stock price. After all, empirical research shows a strong correlation between tr ...

Growth investors focus on stocks that are seeing above-average financial growth, as this feature helps these securities garner the market's attention and deliver solid returns. But finding a growth stock that can live up to its true potential can be a tough task.In addition to volatility, these stocks carry above-average risk by their very nature. Also, one could end up losing from a stock whose growth story is actually over or nearing its end.However, the Zacks Growth Style Score (part of the Zacks Style S ...

Industry Challenges - The foodservice distribution industry is characterized by low profit margins and high inventory turnover, with significant inflation or deflation impacting operational costs and profitability [82]. - Changes in U.S. trade policy, including tariffs and import/export regulations, could adversely affect the company's operating results and lead to supply chain disruptions [83][85]. - A shortage of qualified labor may negatively impact the company's ability to serve customers and achieve strategic objectives, potentially leading to higher wage costs [86][88]. - Unfavorable macroeconomic conditions in the U.S. could reduce discretionary spending, adversely affecting sales and overall demand for the company's products [89][90]. - Increased competition in the foodservice distribution industry may lead to reduced margins and challenges in maintaining market share [91][92]. - Volatile fuel prices directly impact delivery costs, and the company may struggle to pass these costs onto customers, affecting operating results [93]. - Reliance on third-party suppliers exposes the company to risks of supply interruptions and increased product costs, which could negatively impact sales [94][96]. - Changes in consumer eating habits could materially reduce demand for the company's products, impacting financial performance [106]. - Compliance with new laws and regulations regarding food products may incur significant costs and affect operational efficiency [107]. - The company faces risks associated with labor costs, which are a considerable portion of operating expenses, potentially impacting financial performance [113]. - The company may experience product recalls or liability claims, which could lead to unexpected expenditures and damage to its reputation [115]. - Rising interest rates could negatively affect customer demand and the company's financial condition due to increased funding costs [120]. Financial Performance and Strategy - A goodwill impairment charge of $46.3 million was recorded during the year ended December 31, 2024, due to carrying value exceeding fair value [123]. - The company’s growth strategy relies significantly on acquiring other distributors or wholesalers to access untapped market regions and enlarge its customer base [127]. - The company engages in related-party transactions that may create conflicts of interest, potentially impairing investor confidence [108]. - The company’s ability to renew or replace leases on favorable terms is crucial for maintaining operations and profitability [110]. - The company faces a scarcity of desirable acquisition targets and high competition from well-financed entities, which may lead to unfavorable acquisition terms [130]. - The company has identified material weaknesses in its internal control over financial reporting as of December 31, 2024, which could weaken investor confidence [135]. - As of December 31, 2024, the company's aggregate floating rate debt's outstanding principal balance was $59.7 million, representing 35.9% of total debt [223]. - A hypothetical 1% change in the applicable rate would cause the interest expense on the floating rate debt to change by approximately $0.6 million per year [223]. - The company may need to secure additional financing to continue its acquisition strategy, which could involve traditional debt financing or equity issuance [131]. - Integration of acquired businesses poses operational risks, including potential loss of key employees and difficulties in merging operations [132]. Operational Risks - Cybersecurity incidents could disrupt operations and harm the company's reputation, potentially leading to financial losses and legal liabilities [100][104]. - The company is expanding its information technology to improve operations, which increases exposure to cybersecurity risks if not managed properly [105]. - Average diesel fuel prices in 2024 decreased by 10.8% compared to the same period in 2023, but future prices remain unpredictable [224]. - The company does not actively hedge diesel fuel price fluctuations but aims to minimize risks through delivery route optimization [225]. Governance and Shareholder Matters - The company has implemented a stockholder rights plan to discourage hostile takeovers, which may affect stockholder opportunities for premium share prices [143]. - Zhou Min Ni, the former Chairman, beneficially owns approximately 22% of the common stock, giving him significant influence over shareholder decisions [137].

HF Foods Group (HFFG) Q4 2024 Earnings Call March 14, 2025 04:10 PM ET Company Participants Felix Lin - CEO & PresidentCindy Yao - Chief Financial Officer Operator Hello, everyone. Welcome to HS Foods Group's Fourth Quarter and Full Year twenty twenty four Earnings Conference Call. Joining me on today's call are Felix Lin, President and Chief Executive Officer and Cindy Yao, Chief Financial Officer. By now, everyone should have access to the earnings release for the period ended 12/31/2024, that went out Th ...

Core Viewpoint - HF Foods Group Inc. reported quarterly earnings of $0.11 per share, exceeding the Zacks Consensus Estimate of $0.09 per share, but down from $0.24 per share a year ago, indicating a 22.22% earnings surprise [1]. Financial Performance - The company posted revenues of $305.28 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 6.05% and up from $280.87 million year-over-year [2]. - Over the last four quarters, HF Foods Group has surpassed consensus EPS estimates only once and topped consensus revenue estimates two times [2]. Stock Performance - HF Foods Group shares have declined approximately 45.8% since the beginning of the year, compared to a decline of 4.8% for the S&P 500 [3]. - The current consensus EPS estimate for the upcoming quarter is $0.11 on revenues of $303.87 million, and for the current fiscal year, it is $0.43 on revenues of $1.22 billion [7]. Industry Outlook - The Zacks Industry Rank for Food - Miscellaneous is currently in the bottom 42% of over 250 Zacks industries, indicating potential challenges for stock performance [8]. - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact HF Foods Group's stock performance [5]. Future Expectations - The company's earnings outlook will be influenced by management's commentary on the earnings call and the trends in earnings estimate revisions [4][6]. - General Mills, a competitor in the same industry, is expected to report a year-over-year earnings decline of 18.8% in its upcoming results [9].

Revenue - Net revenue for Q4 2024 was $305.3 million, an increase of 8.7% from $280.9 million in the prior year period[3] - Full year 2024 net revenue increased 4.6% to $1,201.7 million compared to $1,148.5 million in the prior year[9] - Net revenue for Q4 2024 was $305.3 million, a 8.7% increase from $280.9 million in Q4 2023[26] Gross Profit - Gross profit for Q4 2024 was $52.2 million, a slight decrease of 0.2% from $52.3 million in the prior year[4] - Full year 2024 gross profit increased 0.6% to $205.2 million compared to $204.0 million in the prior year[10] - Gross profit for the year ended December 31, 2024, was $205.2 million, slightly up from $204.0 million in 2023[26] Net Loss - The company reported a net loss of $43.9 million for Q4 2024, primarily due to a goodwill impairment of $46.3 million[7] - Full year 2024 net loss was $48.1 million, compared to a net loss of $2.7 million in the prior year[12] - The company reported a net loss of $48.1 million for the year 2024, compared to a net loss of $2.7 million in 2023[29] - For the three months ended December 31, 2024, HF Foods Group Inc. reported a net loss of $43.894 million, a decrease of $46.619 million compared to a net income of $2.725 million in the same period of 2023[32] - For the year ended December 31, 2024, the net loss attributable to HF Foods Group Inc. was $48.511 million, a decline of $46.337 million from a loss of $2.174 million in 2023[32] Adjusted EBITDA - Adjusted EBITDA for Q4 2024 increased 39.4% to $14.5 million compared to $10.4 million in the prior year[8] - Full year 2024 adjusted EBITDA increased 21.6% to $42.0 million compared to $34.6 million in the prior year[13] - Adjusted EBITDA for the year ended December 31, 2024, was $42.0 million, an increase of 21.5% from $34.6 million in 2023[29] Expenses - Distribution, selling and administrative expenses for Q4 2024 increased to $48.0 million, representing 15.7% of net revenue[6] - Distribution, selling, and administrative expenses rose to $198.0 million for the year 2024, compared to $195.1 million in 2023[26] Cash Flow - Cash provided by operating activities was $22.6 million for the year ended December 31, 2024, compared to cash used in operating activities of $1.6 million in the prior year[14] - Cash at the end of the period was $14.5 million, down from $15.2 million at the end of 2023[28] Assets and Liabilities - Total assets decreased to $550.0 million in 2024 from $596.5 million in 2023[24] - Total liabilities remained relatively stable at $308.7 million in 2024, compared to $308.5 million in 2023[24] - The company experienced a significant increase in accounts receivable, rising to $54.3 million in 2024 from $47.8 million in 2023[24] Non-GAAP Measures - Non-GAAP net income for the same period was $6.062 million, an increase of 109.5% from $2.894 million in 2023[32] - Non-GAAP net income for the year was $13.968 million, up 38.9% from $10.057 million in 2023[32] - Non-GAAP diluted earnings per share for the year increased to $0.26, up $0.07 from $0.19 in 2023[32] Goodwill Impairment - Goodwill impairment charges amounted to $46.3 million in Q4 2024, with no such charges reported in Q4 2023[26] - Goodwill impairment charges amounted to $46.303 million for both the three months and year ended December 31, 2024[32] Other Costs - The company incurred $2.929 million in executive transition and organizational redesign costs during the year[32] - The company recorded a legal settlement recovery of approximately $10.0 million, which was accounted for as a recovery of previously recorded expenses[33] Tax Rate - The effective tax rate used for adjustments was 24.0% for both the fourth quarter and year-to-date periods of 2024 and 2023[33]

Core Insights - HF Foods Group Inc. reported a net revenue increase of 8.7% for Q4 2024 and 4.6% for the full year 2024, driven by volume growth and improved pricing strategies [5][11] - The company experienced a net loss of $43.9 million in Q4 2024, primarily due to a goodwill impairment charge of $46.3 million [8][9] - Adjusted EBITDA for Q4 2024 increased by 39.4% to $14.5 million, reflecting operational improvements despite the net loss [10][8] Financial Performance - Q4 2024 net revenue reached $305.3 million, up from $280.9 million in the prior year, marking an increase of $24.4 million [5][8] - Full year 2024 net revenue was $1,201.7 million, compared to $1,148.5 million in 2023, an increase of $53.2 million [11] - Gross profit for Q4 2024 was $52.2 million, slightly down from $52.3 million in the previous year, with a gross profit margin decrease to 17.1% from 18.6% [6][8] Operational Insights - The company is expanding into high-growth channels such as specialty grocery and e-commerce to diversify revenue streams [4] - Distribution, selling, and administrative expenses increased by $7.0 million in Q4 2024, primarily due to higher professional fees and labor costs [7] - Cash provided by operating activities for the year ended December 31, 2024, was $22.6 million, a significant improvement from cash used in the prior year [16] Strategic Developments - HF Foods amended its Credit Agreement, increasing its revolver capacity by $25 million to $125 million, enhancing financial flexibility [17][18] - The company aims to leverage favorable market trends and demographics to capitalize on the growing demand for Asian food [18] Market Position - HF Foods is positioned as a leading distributor of food products to Asian restaurants across the U.S., with a strong network of distribution centers [21] - The company recognizes ongoing pressures in key customer segments but remains optimistic about long-term industry fundamentals [4]

Company Overview - HF Foods Group Inc. is a leading marketer and distributor of fresh produce, frozen and dry food, and non-food products primarily to Asian restaurants and other foodservice customers across the United States [2] - The company aims to meet the increasing demand for Asian American restaurant cuisine by leveraging its nationwide distribution network and strong relationships with growers and suppliers in the US, South America, and Asia [2] - HF Foods is headquartered in Las Vegas, Nevada, and trades on Nasdaq under the symbol "HFFG" [2] Investor Engagement - The company will participate in the 37th Annual Roth Conference in Dana Point, CA, on March 17-18, 2025, where the executive management team will host a fireside chat and meetings with investors [3] - The fireside chat is scheduled to begin at 8:00 a.m. PT on March 18, 2025, and will be webcast live, with an archived replay available [3] - On March 19, 2025, the executive management team will participate virtually in the Sidoti Small-Cap Conference, hosting virtual meetings with investors throughout the day [3]

Core Viewpoint - HF Foods Group Inc. has amended its Credit Agreement to enhance financial flexibility, supporting its growth strategy and strategic transformation plan [1][2]. Group 1: Financial Agreement Details - The amended agreement increases HF Foods' aggregate revolving commitment by $25 million, bringing the total to $125 million [1]. - Wells Fargo has been added as an additional lender alongside JPMorgan Chase Bank and Comerica Bank [1][2]. Group 2: Company Overview - HF Foods is a leading distributor of food products to Asian restaurants across the United States, focusing on fresh produce, frozen and dry food, and non-food products [3]. - The company aims to meet the growing demand for Asian American cuisine by leveraging its distribution network and strong relationships with suppliers [3].

Company Overview - HF Foods Group Inc. is a leading marketer and distributor of fresh produce, frozen and dry food, and non-food products primarily to Asian restaurants and other foodservice customers across the United States [2] - The company aims to meet the increasing demand for Asian American restaurant cuisine by leveraging its nationwide distribution network and strong relationships with growers and suppliers of high-quality specialty food products from the US, South America, and Asia [2] - HF Foods is headquartered in Las Vegas, Nevada, and trades on Nasdaq under the symbol "HFFG" [2] Upcoming Events - HF Foods will participate virtually in the Oppenheimer Emerging Growth Conference on February 25, 2025 [1] - The executive management team will host one-on-one meetings with investors throughout the day [1]