Honey Bun (1982) Limited’s first quarter earnings dipped 83 per cent as the company’s expansion costs and lost revenue from Hurricane Melissa weighed on its profitability.

The baked goods manufacturer noted that it had to suspend operations for five days due to the impending storm while commercial activity dipped in the areas most affected by the event. These factors saw the company estimating $105 million in lost sales due to the storm.

Thus, while the company reported a seven per cent increase in revenue to $1.11 billion, it estimates that reduced sales potentially kept it from surpassing $1.2 billion in sales. This was the company’s best first quarter (October to December) revenue performance in its history where it noted export sales grew 57.3 per cent.

However, its net profit declined from $76.92 million to $13.33 million as new lease costs and higher operating expenses dragged the profitability of the business. The company grew its average workforce by 19 per cent to 498 employees in its September 2025 financial year.

“The Angels facility was commissioned on September 6, 2025. While the facility is currently operating below optimal capacity, as production scales, it is expected to generate progressively higher revenues and improved efficiencies over time, supporting enhanced profitability in future periods,” said Chief Executive Officer (CEO) Daniel Chong in the quarterly report.

Chong became the new CEO on October 1 after taking over from founder Michelle Chong who held the role for 43 years.

Honey Bun has invested more than $400 million into its new plant at MJS Industrial and Technology Park in Angels, St Catherine. The new facility will give way for the company to expand its production capacity and product offerings. Honey Bun has operated for most of its history from its Retirement Road, St Andrew property, which had limited space to expand due to other manufacturers owning space in the vicinity.

Company Chairman Herbert Chong noted in the 2025 annual report that the additional capacity at Angels will give the company space to grow its export business which was constrained from its limited space.

“The Angels plant enables us to significantly increase our capacity. We are now able to increase our production of bread and add new bread products. In addition, we will embark on phase 2 of the project to increase capacity of our current lines at Retirement to meet the demand for our products,” Chairman Chong stated in the annual report.

The company’s expansion into the Angels facility opens up room for greater growth due to its proximity to the North-South Highway along with the continued expansion of Highway 2000 East West.

“In the near term, fixed costs associated with the expanded infrastructure are expected to remain elevated relative to revenue as operations scale. However, as production volumes increase and capacity utilisation improves, the company anticipates stronger gross margins and enhanced operating leverage, resulting in improved overall profitability,” the CEO added on the outlook for the business.

Honey Bun is also focused on growing the Swirls brand which it acquired in June 2024. The company renovated its Half-Way-Tree location in late 2024 and opened its second location at the New Kingston Shopping Centre in August 2025. These two locations were estimated to have brought in $38.41 million in 2025.

“Looking ahead to the 2025–2026 financial year, the brand will focus on strategic expansion, continued menu development, operational optimisation, and customer experience strengthening. With strong early performance and clear opportunities for growth, the brand is well positioned to contribute meaningfully to the company’s overall strategic objectives in the coming year,” the annual report stated.

Honey Bun’s total assets grew four per cent during the quarter to $3.07 billion as the company’s receivables and prepayments grew 51 per cent to $342.15 million. Cash and cash equivalents was $230.70 million. Total liabilities increased seven per cent to $1.53 billion due to the company tapping $130 million in new debt while its shareholders equity increased two per cent to $1.54 billion.

Honey Bun’s stock price closed Wednesday at $6.59 which leaves it down seven per cent in 2026 with a market capitalisation of $3.10 billion. Honey Bun paid a $0.02 dividend totalling $9.43 million on January 20. This dividend is lower than the $0.09 dividend paid in December 2024, reflecting the company’s immediate focus of optimising cash resources.