Translation: Original published in Finnish on 05/06/2026 at 09:37 am EEST

Source: Inderes

HKFoods published its Q1 report this morning, which slightly exceeded our expectations in terms of both revenue and earnings. The strong momentum in the retail and food service channels supported revenue, and the company's efficiency measures successfully offset increased costs. As expected, the company reiterated its guidance for an earnings improvement in the current year. Overall, we found the report to be relatively neutral, especially considering the rising costs.

Revenue was supported by volume growth driven by retail and foodservice

In Q1, HKFoods’ revenue grew by 3.8% to 243 MEUR, exceeding our 240 MEUR estimate. The company reported that sales strengthened, particularly in channels with a better margin profile, namely retail and food service, but also in industrial sales. In contrast, export revenue decreased as planned, according to the company. Retail sales were particularly supported by HKFoods' own brands and strong demand for poultry and pork, while beef availability remained tight. The company reports that it has succeeded in commercial measures in the food service market, where it says the demand picture has generally been challenging.

Efficiency measures offset increased costs

The company's comparable EBIT increased to 5.7 MEUR (Q1’25: 4.6 MEUR), which also exceeded our 5.1 MEUR estimate but was mainly due to a lower depreciation level than we expected. Profitability in Q1 was supported especially by a more favorable sales mix and savings achieved in the company's efficiency program. During the quarter, the company also faced cost pressures, particularly due to the rising purchase price of beef and increased energy costs resulting from the cold winter. The reported bottom line was burdened by 0.3 MEUR in non-recurring restoration costs. Adjusted net income also clearly exceeded our estimate, which was impacted by operational development and lower depreciation, in addition to lower-than-expected net financial expenses and taxes, and a higher profit from the associate. 

Guidance reiterated as cost pressures overshadow outlook

In its report, HKFoods reiterated its guidance that expects comparable EBIT to increase from the 2025 level (34.1 MEUR). The company has successfully improved its comparable EBIT for 13 consecutive quarters, although earnings growth has recently slowed compared to, e.g., the very strong performance in 2024. The company anticipates that the uncertain global situation will continue to create upward pressure, particularly on energy, packaging, and logistics costs. This was well in line with our previous expectations, as we had estimated in connection with the earnings preview that the company would face cost pressures due to the tightened geopolitical situation and the conflict in the Middle East.