HF Foods Group Inc. reported its financial results for the third quarter and the nine months ended September 30, 2024, showing a mixed performance in revenue and profitability compared to the previous fiscal period. The company achieved net revenue of $298.4 million for the three months ended September 30, 2024, a 6.0% increase from $281.5 million in the same period of 2023. For the nine months, net revenue rose to $896.4 million, up 3.3% from $867.6 million year-over-year. This growth was primarily driven by product cost inflation and improved pricing, although it was partially offset by a $13.3 million loss from exiting chicken processing businesses.

Despite the revenue growth, HF Foods experienced a net loss of $3.8 million for the third quarter, a significant decline from a net income of $2.0 million in the same quarter of 2023. The nine-month net loss improved slightly to $4.2 million from $5.4 million in the prior year. The gross profit for the third quarter was $50.2 million, down from $50.9 million, resulting in a gross profit margin decrease to 16.8% from 18.1%. The company’s income from operations for the nine months was $3.1 million, a turnaround from a loss of $2.3 million in the same period of 2023.

HF Foods' total assets increased to $612.8 million as of September 30, 2024, from $596.5 million at the end of 2023. Current liabilities also rose to $163.1 million from $143.3 million, while total shareholders’ equity attributable to HF Foods decreased to $283.1 million from $286.7 million. The company reported cash of $11.4 million, down from $15.2 million at the end of 2023.

Strategically, HF Foods has been focusing on operational transformation, including centralized purchasing and digital transformation initiatives. The company has also initiated a comprehensive operational transformation plan aimed at driving growth and cost savings. Notably, HF Foods has assumed the lease for a new distribution center in Powder Springs, Georgia, set to commence in February 2025.

In terms of leadership changes, on October 24, 2024, CEO Xiao Mou (Peter) Zhang was terminated, and Xi (Felix) Lin was appointed as Interim CEO. This leadership transition may influence future segment reporting and goodwill impairment assessments.

The company continues to face challenges, including material weaknesses in its disclosure controls and procedures, which have been reported previously and remain unresolved as of September 30, 2024.