This report does not constitute a rating action. We anticipate High Liner will stabilize its margins despite recent profitability headwinds. The company demonstrated strong top-line momentum in first-quarter 2026, with revenue increasing 24.8% to $334.9 million compared to $268.4 million in the same period last year. Favorable Lent timing, the Conagra Brands acquisition, and a new USDA contract, alongside increased promotional activity and new customer wins, drove 10.6% volume growth. However, S&P Global Ratings-adjusted gross margins for the last-12-month (LTM) period ending first-quarter 2026 contracted 100 basis points (bps) to 20.7% (from 21.7% in 2025), while S&P Global Ratings-adjusted EBITDA margins declined to 7.3% (from 8.4%) with two-thirds of pressure stemming from elevated raw material costs. Nonetheless, we expect the
