This article first appeared on GuruFocus .
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Revenue:$1.02 billion in Q2 2026, an increase of 1.6% year-over-year.
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Adjusted EBITDA:$137.1 million, up 4.8% from the prior year quarter.
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Adjusted EBITDA Margin:Expanded by 40 basis points to 13.4%.
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Prepared Foods Sales:Decreased 2% due to lower volume and increased trade promotion spending, partially offset by pricing and improved mix.
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Poultry Sales:Increased 7.1%, driven by higher foodservice and retail volumes, improved channel mix, and pricing.
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SG&A Expenses:$104.5 million, up from $99.6 million in Q2 2025, due to timing of advertising and promotional expenses and higher consulting fees.
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Earnings from Continuing Operations:$40.8 million, or $0.33 per basic share, compared to $39 million, or $0.31 per basic share, last year.
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Adjusted Earnings:$53.9 million, or $0.44 per basic share, versus $41.4 million, or $0.33 per basic share, in the prior year.
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Capital Expenditures:$23.3 million in the quarter, down from $24.7 million in Q2 2025.
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Free Cash Flow:An outflow of $18.9 million in the quarter, compared to an inflow of $216 million last year, reflecting timing of working capital and higher tax payments.
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Net Debt to Adjusted EBITDA:Leverage ratio of 2.2 times at quarter end, compared to 2.1 times a year ago.
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Shareholder Returns:Returned $78 million year-to-date through dividends (up 10.5%) and share repurchases of approximately 0.8 million shares under the NCIB.
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First Half 2026 Revenue:Increased approximately 4% to nearly $2 billion.
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First Half 2026 Adjusted EBITDA:Increased more than 5% to approximately $260 million.
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Full Year 2026 Guidance:Reaffirmed mid-single-digit revenue growth, adjusted EBITDA of $520 million to $540 million, and capital investments of $160 million to $180 million.
Release Date: August 12, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Revenue grew for the seventh consecutive quarter, with a 1.6% increase in Q2 2026.
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Adjusted EBITDA margin expanded by 40 basis points to 13.4%, driven by improved operating efficiency and favorable mix.
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Poultry sales increased 7.1%, supported by volume growth, improved channel mix, and favorable pricing, with Maple Leaf Prime gaining market share.
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The protein snacking innovation platform, including Mighty Protein and Greenfield protein kits, is gaining traction with distribution gains in Canada, the US, and new channels like gas and convenience.
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The company reaffirmed its 2026 guidance, expecting mid-single-digit revenue growth and adjusted EBITDA in the range of $520 million to $540 million.
Negative Points
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Prepared foods sales declined 2% due to lower volumes and increased trade promotion spending, partly due to a temporary volume response to pricing actions.
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Revenue growth moderated to 1.6% in Q2, reflecting the roll-off of certain lower margin private label volumes.
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Input cost inflation remains elevated across pork bellies, beef, chicken, turkey, packaging, and ingredients, with costs expected to increase in the second half of the year.
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Free cash flow was an outflow of $18.9 million in the quarter, impacted by timing of working capital investments and higher income tax payments.
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The company faces seasonality headwinds in Q3, with raw material input costs often higher in the second half, potentially creating margin variability.
Q & A Highlights
Q: Can you provide the building blocks for the second-half story and explain why management remains confident in the 2026 outlook, given the implied acceleration in growth and the noted seasonality and inflationary pressures? A: Curtis Frank (President and CEO) explained that confidence is supported by several tangible drivers: continued strength in poultry, easing volume impacts from pricing in prepared foods, distribution and velocity gains in the protein snacking innovation platform (including expansion into gas/convenience and the US), and the relaunch of the Eaves brand in Canada. He also noted that the full impact of pricing will be realized in H2 and that the Fuel for Growth program continues to contribute to margin expansion.
Q: Regarding the 2% decline in prepared foods, was the volume response more sensitive to pricing this time, and what does that say about the state of the consumer? A: Curtis Frank (President and CEO) stated that the decline was not a surprise and was driven by two factors: the roll-off of certain lower-margin private label volumes and the normal volume response to pricing actions taken in Q1. He emphasized that this is typical in CPG and expects trends to normalize as the year progresses. He noted the consumer remains under stress but the company's differentiated portfolio, including sustainable meats, continues to perform well.
Q: Should we be encouraged by the potential for margin expansion in the second half given declining core costs, and should we see that in Q3 or Q4? A: Curtis Frank (President and CEO) cautioned against using the pork cutout as a proxy for company margins, noting pork is less than 25% of input costs. He highlighted that costs for beef, turkey, chicken, packaging, and freight are expected to increase in H2. He reiterated that Q3 is typically the lower watermark for margins due to seasonality, but the company feels well-positioned with its pricing for the balance of the year.
Q: Can you double-click on the 2% decline in prepared meats and highlight which categories saw the most pressure and any bright spots? A: Curtis Frank (President and CEO) described the decline as broad-based, which is normal following pricing changes. Bright spots included the protein snacking portfolio and innovation platform, which are expanding distribution. He also noted that sustainable meat sales were up mid-single-digits with positive volumes, demonstrating the strength of the differentiated portfolio despite the challenging consumer environment.
Q: Is there a possibility you will need to take more price this year, or do you have it covered given the surge in fuel and input costs? A: Curtis Frank (President and CEO) confirmed that the company believes it has inflation covered through a combination of pricing taken earlier in the year, trade promotion adjustments, fuel surcharges, and tactical pricing already implemented for the back half. He stated that based on everything known today, the company is well-positioned for the inflation expected in H2.
Q: Can you provide an update on the Fuel for Growth initiative and current capacity utilization? A: Curtis Frank (President and CEO) detailed that the program has focused on reorganizing SG&A, strategic procurement, and right-sizing manufacturing leadership. The current phase involves operational excellence initiatives in manufacturing facilities, which are delivering strong operating efficiencies. The company is also investing in technology and automation, with a continued focus on optimizing the manufacturing network and capacity utilization for the future.
Q: Regarding the snacking innovation platform, what white space opportunity exists in the US, and has the performance of Mighty Protein benefited from poultry being a more affordable alternative to beef? A: Curtis Frank (President and CEO) highlighted significant white space in the US, citing recent national distribution gains with three retailers and expansion of a club operator from three to eight regions. He noted that while poultry affordability may play a role, the core consumer insight driving growth is the demand for healthy, portable protein snacking. The company is also looking to expand the portfolio beyond chicken to other species.
Q: Can you provide more color on the working capital drag in the quarter and whether we should expect around $200 million plus in free cash flow this year? A: David Smales (CFO) attributed the drag to seasonality, which is the reverse of last year's timing. He did not provide annual free cash flow guidance but pointed to the five-year outlook of $1.7 billion to $1.8 billion in free cash flow from Investor Day, implying healthy annual generation. He confirmed 2026 should be in line with that, with the difference being a matter of first-half versus second-half seasonality.
Q: Can you share the impact on revenue from the roll-off of lower-margin private label during the quarter? A: Curtis Frank (President and CEO) declined to break out the specific impact but described it as a small amount. He noted that a good portion of that business has already been secured back in another area for the back half of the year, indicating it is not a structural issue.
Q: Can you provide context on the fundamentals of the US business, given revenue was down around 4%? A: Curtis Frank (President and CEO) explained that a good portion of the decline was due to the private label roll-off in the US market and continued headwinds in the plant protein category. However, the Greenfield Natural Meat Company brand is growing at a rate greater than 10% over the last 12 months, showing positive momentum in the sustainable meats segment.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
