Operating in a challenging market driven by consumer pull back and increased competitive pressures in North America, High Liner Foods reported a Q2 2024 decrease of $36 million, or 14.2%, to $218.3 million compared to $254.3 million in the same period in 2023, driven by the volume declines and reduced pricing reflecting deflationary markets.
Volume for the Lunenburg, Nova Scotia, Canada-headquartered value-added frozen seafood producer and marketer decreased 7.7 million pounds, or 13.0%, to 51.7 million pounds during the second quarter of 2024, which ended on June 29.
Given the highly promotional and price sensitive retail and foodservice markets, the company continues to take actions on price, innovation and distribution to strengthen its competitive positioning and to mitigate the impact of external pressures while preserving profitability.
A weaker Canadian dollar in the first half of his year compared to the same period in 2023 decreased the value of reported US dollar sales from High Liner’s CAD-denominated operations by approximately $1.1 million relative to the conversion impact last year.
Gross profit in the Q2 2024 increased by $0.5 million to $52.5 million compared to $52.0 million in the same period last year, and gross profit as a percentage of sales increased by 360 basis points to 24.0% compared to 20.4%. The rise in gross profit reflects lower raw material costs, normalized inventory levels, a more profitable mix and a balanced approach to pricing focused on supporting both bottom and top line of the business.
“We continued to grow the profitability of our business during the second quarter, increasing EBITDA and gross profit, while continuing to take action to improve our top line performance,” said President & CEO Paul Jewer. “While market softness certainly presents headwinds, the year over year volume decline in Q2 is once again a result of lower levels of contract manufacturing, intentional exit of low margin business and a return to normalized inventory levels compared to 2023.”
He added: ”As we navigate a dynamic market, we remain focused on leveraging the diversity of our supply chain, customer base and portfolio across price points and species to showcase value and choice to customers and consumers. This approach, paired with targeted promotional activity, is the path to sustainable improvements aligned with our longer-term growth agenda.”
While experiencing year over year decline in retail volumes, High Liner expanded distribution in strategic areas including club, value and premium segments. In the foodservice segment, the company saw continued success of new value-added innovations in terms of volume and expanded distribution, and generated continued growth in alternative species despite the overall year over year decline in volume.
About High Liner
High Liner Foods’ retail branded products are sold throughout the United States and Canada under the High Liner, Fisher Boy, Mirabel, Sea Cuisine and Catch of the Day labels, and are available in most grocery and club stores. The company also sells branded products to restaurants and institutions under the High Liner, Mirabel, Icelandic Seafood and FPI labels, and is a major supplier of private label value-added seafood products to North American food retailers and foodservice distributors. The company is publicly traded on the Toronto Stock Exchange under the symbol HLF.
