Gross margins have compressed to 8.1% in 2025Q4, reflecting a diminished ability to pass through costs amidst a 9.9% year-over-year revenue decline.
| Sales/Revenue | 62.9M | 74.27M | 84.33M | 76.37M | 70.25M | 59.14M | 65.52M | 60.39M | 49.4M |
| Revenue Growth % | -15.32% | -11.93% | 10.43% | 8.71% | 18.79% | -9.74% | 8.5% | 22.24% | - |
| Cost of Goods Sold | 56.1M | 66.95M | 71.98M | 65.23M | 58.93M | 48.47M | 50.9M | 47.14M | 39.73M |
| COGS % of Revenue | 89.2% | 90.15% | 85.35% | 85.42% | 83.89% | 81.97% | 77.68% | 78.07% | 80.42% |
| Gross Profit | 6.79M | 7.32M | 12.36M | 11.14M | 11.32M | 10.66M | 14.62M | 13.24M | 9.67M |
| Gross Margin % | 10.8% | 9.85% | 14.65% | 14.58% | 16.11% | 18.03% | 22.32% | 21.93% | 19.58% |
| Gross Profit Growth % | -7.15% | -40.79% | 10.96% | -1.63% | 6.15% | -27.07% | 10.42% | 36.9% | - |
| Operating Expenses | 9.94M | 9.02M | 9.89M | 8.22M | 8.74M | 6.2M | 6.24M | 5.05M | 4.58M |
| OpEx % of Revenue | 15.81% | 12.15% | 11.73% | 10.76% | 12.44% | 10.49% | 9.53% | 8.36% | 9.27% |
| Selling, General & Admin | 7.78M | 6.78M | 7.34M | 5.89M | 6.68M | 4.08M | 4.47M | 3.6M | 3.13M |
| SG&A % of Revenue | 12.36% | 9.13% | 8.7% | 7.71% | 9.52% | 6.9% | 6.82% | 5.96% | 6.33% |
| Research & Development | 2.17M | 2.24M | 2.55M | 2.33M | 2.06M | 2.12M | 1.78M | 1.45M | 1.45M |
| R&D % of Revenue | 3.45% | 3.02% | 3.02% | 3.05% | 2.93% | 3.59% | 2.71% | 2.4% | 2.93% |
| Other Operating Expenses | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Operating Income | -3.15M | -1.71M | 2.47M | 2.92M | 2.58M | 4.46M | 8.38M | 8.2M | 5.1M |
| Operating Margin % | -5.01% | -2.3% | 2.92% | 3.82% | 3.67% | 7.54% | 12.79% | 13.58% | 10.32% |
| Operating Income Growth % | -84.55% | -169.2% | -15.44% | 13.14% | -42.21% | -46.76% | 2.21% | 60.85% | - |
| EBITDA | -2.51M | -947.43K | 3.18M | 3.71M | 3.35M | 5.21M | 9.03M | 8.92M | 6.02M |
| EBITDA Margin % | -3.99% | -1.28% | 3.77% | 4.86% | 4.76% | 8.82% | 13.78% | 14.78% | 12.19% |
| EBITDA Growth % | -164.57% | -129.77% | -14.21% | 10.88% | -35.84% | -42.24% | 1.15% | 48.25% | - |
| D&A (Non-Cash Add-back) | 643.34K | 759.4K | 715.88K | 792.89K | 767.68K | 753.63K | 648.25K | 726.66K | 923.41K |
| EBIT | -1.9M | -362.55K | 3.81M | 3.75M | 4.53M | 5.74M | 8.6M | 8.67M | 13.4M |
| Net Interest Income | 220.62K | 206.34K | -296.26K | -1.63M | -2.06M | -2.16M | -2.15M | -2.08M | 0 |
| Interest Income | 220.62K | 206.34K | 0 | 0 | 0 | 0 | 0 | 0 | 2.04M |
| Interest Expense | 0 | 0 | 296.26K | 1.63M | 2.06M | 2.16M | 2.15M | 2.08M | 0 |
| Other Income/Expense | 1.25M | 1.55M | 1.05M | -795.75K | -109.93K | -885.34K | -1.93M | -1.61M | 6.26M |
| Pretax Income | -1.9M | -156.22K | 3.52M | 2.12M | 2.47M | 3.58M | 6.45M | 6.59M | 11.36M |
| Pretax Margin % | -3.01% | -0.21% | 4.17% | 2.78% | 3.51% | 6.05% | 9.85% | 10.91% | 22.99% |
| Income Tax | -494.81K | -298.61K | 220.85K | 173.02K | -89K | 218.95K | 1.01M | 1.34M | 2.03M |
| Effective Tax Rate % | 26.1% | 191.15% | 6.28% | 8.16% | -3.61% | 6.12% | 15.58% | 20.3% | 17.86% |
| Net Income | -1.4M | 137.42K | 3.26M | 1.92M | 2.53M | 3.32M | 5.39M | 5.2M | 9.24M |
| Net Margin % | -2.22% | 0.18% | 3.86% | 2.52% | 3.6% | 5.62% | 8.23% | 8.6% | 18.69% |
| Net Income Growth % | -1115.8% | -95.78% | 69.3% | -23.99% | -23.81% | -38.38% | 3.77% | -43.74% | - |
| Net Income (Continuing) | -1.4M | 142.4K | 3.3M | 1.95M | 2.56M | 3.36M | 5.45M | 5.25M | 9.33M |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 298K | 314.21K | 274.82K | 250.43K | 264.51K | 224.41K | 178.6K | 132.71K | 86.51K |
| EPS (Diluted) | -0.10 | 0.01 | 0.23 | 0.15 | 0.21 | 0.24 | 0.54 | 0.39 | 0.92 |
| EPS Growth % | - | -95.83% | 53.33% | -28.57% | -12.5% | -55.56% | 38.46% | -57.61% | - |
| EPS (Basic) | -0.10 | 0.01 | 0.23 | 0.15 | 0.21 | 0.24 | 0.40 | 0.39 | 0.68 |
| Diluted Shares Outstanding | 14.28M | 14.26M | 14.14M | 13.23M | 12.12M | 13.59M | 10M | 13.21M | 10M |
| Basic Shares Outstanding | 14.28M | 14.26M | 14.14M | 13.23M | 12.12M | 13.59M | 10M | 13.21M | 10M |
| Dividend Payout Ratio | - | - | - | - | - | - | - | - | - |
Cyclical demand and margin compression
As reported in recent financial filings, HUDI's revenue has experienced a sustained decline, culminating in a 9.9% year-over-year contraction in 2025Q4, which highlights the company's ongoing struggle to maintain top-line momentum amidst a challenging domestic industrial environment and volatile international demand for specialized steel products.
The consistent downward trajectory in quarterly revenue suggests that the company's project-based model is highly sensitive to broader industrial capital expenditure cycles. This persistent weakness indicates that the firm may be losing market share or facing significant pricing pressure in its core stainless steel pipe and tube segments.
Based on the company's reported figures, gross margins have compressed significantly to 8.1% in 2025Q4, reflecting a diminished ability to pass through raw material costs and suggesting that the firm currently lacks the pricing power necessary to maintain profitability in a competitive commodity-linked steel market.
The erosion of gross margins from historical peaks above 15% indicates that the company is increasingly vulnerable to fluctuations in nickel and chromium prices. This margin compression appears to be a structural issue, as the firm struggles to differentiate its product offerings sufficiently to command premium pricing.
According to the income statement data, HUDI's operating margin has deteriorated to -7.5% in 2025Q4, demonstrating that the company's fixed cost base is no longer scaling efficiently with declining revenue, thereby amplifying the impact of top-line contraction on the firm's bottom-line performance.
The inability to reduce SG&A expenses in proportion to falling sales suggests a rigid cost structure that creates significant operating leverage risk. Investors should monitor whether management can successfully rationalize these fixed costs, as current levels appear unsustainable given the prevailing revenue environment.
Financial statements indicate that HUDI's shift to a net loss of $1.5 million in 2025Q4 raises concerns regarding the viability of its current business model, as the company faces a narrowing window to restore profitability before its cash reserves are further depleted by ongoing operational deficits.
While the company maintains a relatively clean balance sheet, the persistent negative operating margins suggest that the firm is currently burning capital to sustain its market presence. This warrants further investigation into whether the company's specialized certifications can actually drive a pivot toward higher-margin aerospace or medical applications.
Quick answers to the most common questions about buying HUDI stock.
For fiscal year 2025, Huadi International Group Co., Ltd. (HUDI) reported total revenue of $62.9M. This represents a 27.3% increase compared to $49.4M in 2017.
Huadi International Group Co., Ltd. (HUDI) reported a net loss of $1.4M for the fiscal year ending 2025.
Huadi International Group Co., Ltd. (HUDI) reported an operating income of $-3.1M, resulting in an operating profit margin of -5.0%. This margin reflects the operational efficiency of the business before interest and taxes.
Huadi International Group Co., Ltd. (HUDI) generated $6.8M in gross profit for the year, representing a gross profit margin of 10.8%. This demonstrates the company's core pricing power and production efficiency.