Happy Belly Food Group Reports $19.3M in Q1 System Wide QSR Sales Up 80.4% Growth YOY

Rhea-AI Summary

Happy Belly Food Group (OTCQB: HBFGF) reported Q1 2026 unaudited results, highlighting strong expansion in its quick service restaurant portfolio.

System-wide QSR sales reached $19.3M, up 80.4% year over year. Total operating revenues were $6.0M (+82.2%), product sales $4.7M (+70.3%), and royalties/franchise fees $0.97M (+118%).

Restaurant count rose to 87 locations, with 10 openings in Q1 and 17 more opened by April 30, 2026. Adjusted EBITDA was $(0.17M), or (2.9%), versus $0.14M and 4.2% a year earlier. Cash stood at $6.2M with under $60,000 in secured debt.

Positive

• System-wide QSR sales $19.3M, up 80.4% year over year
• Total operating revenues $6.0M, up 82.2% from Q1 2025
• Product sales $4.7M, increasing 70.3% year over year
• Royalties and franchise fees $0.97M, up 118% versus prior year
• Restaurant count increased to 87 locations, up 74.0% from 50
• Cash balance $6.2M versus $3.0M a year earlier, with under $60,000 secured debt

Negative

• Adjusted EBITDA $(0.17M) and (2.9%) margin versus $0.14M and 4.2% margin in Q1 2025

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Toronto, Ontario--(Newsfile Corp. - May 13, 2026) - Happy Belly Food Group Inc. (CSE: HBFG) (OTCQB: HBFGF) ("Happy Belly" or the "Company"), a leader in acquiring and scaling emerging food brands is pleased to announce its unaudited financial results and corporate update for the fiscal quarter ended March 31^st, 2026.

Q1 2026 Financial and Recent Business Highlights

• System-wide sales across Quick Service Restaurants (QSR") totalled $19.3M in the first quarter of fiscal 2026, up 80.4% versus the same quarter last year (2025 - $10.7M). The increase is attributed to organic baseline restaurant growth, alongside increased restaurant count, which reached 87 operating restaurants at the end of Q1 2026, up 74.0% versus 50 in the prior year.

• Total operating revenues, services, interest income and rebates totalled $6.0M in the first quarter of fiscal 2026, up 82.2% versus the same quarter last year (2025 - $3.3M). Year-over-year growth was driven by continued sales growth in QSR, multiple business acquisitions in the past twelve months, and net new restaurants (10 new openings in Q1).

• Total product sales totalled $4.7M in the first quarter of 2026, up 70.3% versus the same quarter last year (2025 - $2.8M). In addition, royalties and franchise fee revenues reached $0.97M during the quarter, up 118% from the prior year (2025 - $0.45M), which was driven by an increase in royalties collected from added franchised restaurants in the system.

• Adjusted EBITDA was $(0.17M) or (2.9%) in the first quarter of fiscal 2026 versus $0.14M or 4.2% in the same quarter last year.

• Total cash and cash equivalents remain healthy at $6.2M as of March 31, 2026 (2025 - $3.0M).

• As of April 30, 2026, subsequent to fiscal 2025, the Company has opened and is operating 17 additional restaurants.

Management Commentary

"Happy Belly continued to deliver strong growth in the first quarter of fiscal 2026, with system-wide sales across our Quick Service Restaurant portfolio increasing 80.4% year over year to $19.3 million. This growth reflects continued organic baseline restaurant performance, the contribution of recent acquisitions, and the expansion of our operating restaurant base to 87 locations at quarter end, up 74.0% from the prior year," said Sean Black, Chief Executive Officer of Happy Belly Food Group. "During the quarter, we opened 10 new restaurants, further demonstrating the strength and repeatability of our growth model. Subsequent to quarter end, we continued that momentum, with 7 additional restaurants opened and operating. This continued expansion reinforces the demand for our brands and the effectiveness of our area developer and franchise platform."

"Total operating revenues also increased 82.2% year over year to $6.0 million, while total product sales increased 70.3% to $4.7 million. Importantly, royalties and franchise fee revenues grew 118% to $0.97 million, driven by the continued expansion of franchised restaurants across our system. This is a key metric for us as we scale towards 100+ operating locations in the first half of this year. As our restaurant footprint grows, these higher-margin revenue streams become an increasingly important contributor to our financial profile."

"With $6.2 million in cash at quarter end, and less than $60,000 in total secured debt, we remain well positioned to continue executing our strategy without having to slow down. We are proud of the progress made in Q1 2026 and remain focused on disciplined growth, operational execution, and scaling Happy Belly as a leading acquirer and operator of emerging food brands. Our expanding franchise system provides increased royalty and franchise fee revenues providing a strong foundation for long-term shareholder value creation. Moving forward in 2026 we anticipate delivering significant organic growth, surpassing our original expectations for the full year. With cash in the bank, building the business in the back half of 2026 is going to be a lot of fun".

"We are just getting started," said Sean Black.

Full details of the financial reports and operating results for the first quarter of fiscal 2026, are described in the Company's consolidated financial statements with accompanying notes and related Management's Discussion and Analysis, available on SEDAR+ at www.sedarplus.ca.

FOOTNOTES:
1. Adjusted EBITDA Is a non-IFRS financial measure which does not have a standardized meaning prescribed by IFRS. Adjusted EBITDA and Adjusted EBITDA Margin are used by management as supplemental measures to review and assess operating performance and to provide a more complete understanding of factors and trends impacting the Company's business. Management believes Adjusted EBITDA are useful measures of operating performance and the Company's ability to generate cash-based earnings, as they provide a more relevant position of operating results by excluding the effects of financing and investing activities, which removes the effects of interest, depreciation and amortization expenses as well as other expenses, as described, that are not reflective of the Company's underlying business. This non-IFRS measure is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.

Adjusted EBITDA is defined as net comprehensive income or (loss), excluding interest, taxes, depreciation and amortization (EBITDA), adjusted for share-based compensation, gain (loss) on equity investments and sublease, expected credit loss and non-recurring expenses.

Franchising
For franchising inquiries please see www.happybellyfg.com/franchise-with-us/ or contact us at hello@happybellyfg.com.

About Happy Belly Food Group
Happy Belly Food Group Inc. (CSE: HBFG) (OTCQB: HBFGF) ("Happy Belly" or the "Company") is a leader in acquiring and scaling emerging food brands across Canada.

Happy Belly 1

To view an enhanced version of this graphic, please visit:
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Sean Black
Co-founder, Chief Executive Officer

Shawn Moniz
Co-founder, President

FOR FURTHER INFORMATION, PLEASE VISIT:
www: www.happybellyfg.com or email hello@happybellyfg.com
If you wish to contact us please call: 1-877-589-8805

Neither the Canadian Securities Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Canadian Securities Exchange) accepts responsibility for the adequacy or accuracy of this press release, which has been prepared by management.

Cautionary Note Regarding Forward-Looking Statements

All statements in this press release, other than statements of historical fact, are "forward-looking information" with respect to the Company within the meaning of applicable securities laws. Forward-Looking information is frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur and include the future performance of Happy Belly and her subsidiaries. Forward-Looking statements are based on the opinions and estimates at the date the statements are made and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those anticipated in the forward-looking statements. There are uncertainties inherent in forward-looking information, including factors beyond the Company's control. There are no assurances that the business plans for Happy Belly described in this news release will come into effect on the terms or time frame described herein. The Company undertakes no obligation to update forward-looking information if circumstances or management's estimates or opinions should change except as required by law. The reader is cautioned not to place undue reliance on forward-looking statements. For a description of the risks and uncertainties facing the Company and its business and affairs, readers should refer to the Company's Management's Discussion and Analysis and other disclosure filings with Canadian securities regulators, which are posted on www.sedarplus.ca.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/297276

FAQ

How did Happy Belly Food Group (HBFGF) perform in Q1 2026?

Happy Belly Food Group reported strong year-over-year growth in Q1 2026, led by higher system-wide QSR sales and operating revenues. According to Happy Belly, Q1 system-wide sales reached $19.3 million and total operating revenues were $6.0 million, both significantly above Q1 2025 levels.

What were Happy Belly Food Group (HBFGF) Q1 2026 system-wide QSR sales?

Happy Belly Food Group reported Q1 2026 system-wide QSR sales of $19.3 million, an 80.4% increase year over year. According to Happy Belly, this growth came from organic restaurant performance, recent acquisitions, and expanding to 87 operating locations compared with 50 in the prior-year quarter.

Did Happy Belly Food Group (HBFGF) grow royalties and franchise fees in Q1 2026?

Yes, Happy Belly Food Group increased Q1 2026 royalties and franchise fee revenues to $0.97 million, up 118% year over year. According to Happy Belly, this was driven by more franchised restaurants in the system, making these higher-margin streams increasingly important as the footprint scales.

What was Happy Belly Food Group (HBFGF) Q1 2026 adjusted EBITDA result?

Happy Belly Food Group reported Q1 2026 adjusted EBITDA of $(0.17) million, representing an adjusted EBITDA margin of (2.9%). According to Happy Belly, this compares with adjusted EBITDA of $0.14 million and a 4.2% margin in the same quarter of 2025.

How many restaurants did Happy Belly Food Group (HBFGF) operate after Q1 2026?

Happy Belly Food Group operated 87 restaurants at the end of Q1 2026, up from 50 a year earlier. According to Happy Belly, it opened 10 restaurants during Q1 and, by April 30, 2026, had opened and was operating 17 additional locations.

What was Happy Belly Food Group (HBFGF) cash and debt position at March 31, 2026?

Happy Belly Food Group ended March 31, 2026, with $6.2 million in cash and cash equivalents. According to Happy Belly, this compares with $3.0 million a year earlier, and the company reported having less than $60,000 in total secured debt at quarter end.