High Liner Foods, a leading North American value-added frozen seafood company, has released financial results for the thirteen and twenty-six weeks ended July 4, 2026.
“During the second quarter, we maintained topline momentum while taking a more disciplined approach to promotions, supported by sustained demand and strong customer response to new product innovation,” said Paul Jewer, president and chief executive officer of the Lunenburg, Nova Scotia, Canada-headquartered company. “Adjusted EBITDA increased year over year, both on a reported basis and when normalizing for tariffs, reflecting progress on our strategic initiatives despite continuing inflation and higher raw material costs . We remain focused on executing our plan for top and bottom-line growth through the balance of 2026 and beyond.”
Sales volume for the second quarter of 2026, increased by 2.2 million pounds, or 4.0%, to 57.0 million pounds compared to 54.8 million pounds in the thirteen weeks ended June 28, 2025, due to sustained demand for High Liner Foods’ diversified product portfolio, the successful launch of new product innovations, additional contract manufacturing business and volume associated with a United States Department of Agriculture (USDA) contract.
Sales in Q2 2026 rose by $29.7 million, or 12.4%, to $269.3 million compared to $239.6 million in the same period the year before, driven both by the increase in volume as well as increased pricing reflecting inflationary markets.
Gross profit in the second quarter of this year decreased by $3.2 million to $50.1 million compared to $53.3 million in the same period in the previous year. Gross profit as a percentage of sales declined by 370 basis points to 18.6% compared to 22.3%.
The decrease in gross profit was largely driven by $10.1 million in inventory related losses associated with a fire at a third-party warehouse facility, which High Liner Foods expects to recover through the recognition of insurance coverage by the end of 2026, and the impact of this has been normalized in Adjusted EBITDA and Adjusted Net Income.
The inventory loss is partially offset by $7.9 million in International Emergency Economic Powers Act (IEEPA) tariff recovery recognized during the second quarter. Gross profit in Q2 2026 includes approximately $5.7 million in incurred IEEPA related tariffs in cost of sales, excluding the tariff recovery, compared to $2.8 million in the same period of 2025.
Adjusted EBITDA in the second quarter of 2026 increased by $5.1 million to $30.2 million compared to $25.1 million in the same period in 2025, while Adjusted EBITDA as a percentage of sales rose 11.2% compared to 10.5%. The increase in Adjusted EBITDA reflects the company’s balanced approach to pricing, favorable SG&A and the tariff recovery previously reported.
Reported net income in the second quarter of this year decreased by $3.4 million to net income of $5.1 million (diluted EPS of $0.18) compared to $8.5 million (diluted EPS of $0.28) during the same period in 2025. The decrease in net income reflects the decrease in gross profit, increased distribution expenses and higher financing costs, partially offset by favorable SG&A and lower business acquisition, integration and other expense.
Reported net income in the second quarter of 2026 and 2025 included certain non-routine expenses classified as “business acquisition, integration and other expense.” Excluding the impact of these non-routine items, in addition to the inventory loss (Refer to Recent Developments in the 2Q26 MD&A) or other non-cash expenses and share-based compensation, Adjusted Net Income in the second quarter of 2026 increased by $1.2 million, or 10.4%, to $12.7 million compared to $11.5 million in the same period in the prior year. Adjusted Diluted EPS increased to $0.44 from $0.38 in 2025.
Net cash flows provided by (used in) operating activities in the second quarter of 2026 declined by $18.6 million to an outflow of $3.0 million compared to an inflow of $15.6 million in the same period in 2025. The decrease is primarily driven by cash outflows from non-cash working capital balances, specifically purchases of inventory and higher accounts receivable balances, partially offset with an increase in accounts payable balances. Cash outflows also increased as a result of higher cash taxes paid. These are partially offset with higher cash flows provided through operations in the second quarter of 2026 compared to the prior year. Capital expenditures were $9.1 million in the first half of 2026 compared to $7.9 million in the prior year.
Net Debt increased by $13.4 million to $335.8 million at July 4, 2026 compared to $322.4 million at January 3, 2026, reflecting higher bank loans and lease liabilities, partially offset with lower long-term debt and higher cash balances.
Net Debt to Rolling Twelve-Month Adjusted EBITDA was 3.6x at July 4, 2026 compared to 3.5x at the end of Fiscal 2025 and 2.3x at December 28, 2024. The ratio is expected to improve throughout the year and be slightly below the company’s long-term target of 3.0x at the end of Fiscal 2026.
Events After the Reporting Period
In addition to the $7.9 million tariff recovery received during the second quarter, High Liner received further IEEPA tariff recovery of $27.9 million during the third quarter. While the additional amount will be recognized in third quarter 2026 financial results, the benefit relates to tariff costs incurred during 2025 and the first half of 2026, when tariffs placed significant pressure on the company’s margins.
Outlook
“While we anticipate that cautious consumer spending, higher raw material costs and ongoing tariffs will continue to put pressure on our operating environment, momentum behind the initiatives we have in place to grow the business continues to build,” said President and CEO Jewer. “Our progress in the second quarter, together with improved execution and the underlying strength of our business, reinforces my confidence in delivering year-over-year Adjusted EBITDA growth in 2026, independent of any tariff recoveries.”
High Liner Foods’ performance expectations are based on current forecasts and are subject to broader macroeconomic conditions, including the impact of ongoing geopolitical uncertainty and increased fuel prices.
Dividend
High Liner’s board of directors has approved a quarterly dividend of CAD $0.175 per share on the company’s common shares, payable on September 15, 2026 to holders of record on September 1. These dividends are considered “eligible dividends” for Canadian income tax purposes.
