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Karat Packaging Reports Third Quarter 2026 Financial Results

KRT
  • Karat Packaging Inc. reported third quarter 2026 net sales of $134.7 million, an 8.2 percent increase from the prior-year quarter.
  • Gross profit for the quarter reached $45.1 million, a 5.2 percent rise, while gross margin declined to 33.5 percent from 34.5 percent.
  • Net income for the third quarter was $4.7 million, down from $7.6 million in the prior-year quarter, resulting in a net income margin of 3.5 percent.
  • Adjusted EBITDA for the quarter was $8.9 million, a decrease from $13.1 million, with an adjusted EBITDA margin of 6.6 percent.
  • Net income attributable to Karat Packaging was $4.4 million, or $0.22 per diluted share, compared to $7.3 million, or $0.36 per share, in the prior year.
  • Online sales grew nearly 38 percent year-over-year in the third quarter, contributing to total volume growth of $10.7 million.
  • Increased resin prices, import costs, and shipping expenses pressured margins, with ocean freight costs rising $2.4 million.
  • The company expects fourth quarter 2026 net sales to increase by 9 to 11 percent, with gross margins between 33 to 35 percent.
  • Full-year 2026 net sales are projected to grow 9 to 11 percent, with gross margins expected between 39 to 41 percent.
  • Full-year 2026 adjusted EBITDA margin is anticipated to be approximately mid-teens, including the impact of IEEPA tariff refunds.
  • The company secured four new chain accounts in the third quarter, with shipments expected to begin in the first half of 2027.
  • Karat Packaging is diversifying its global supply chain toward Indonesia, Malaysia, and South America to mitigate high freight costs.
  • Price increases on select items are planned for the current month and January 2027 to offset elevated operational costs.
  • A new Florida distribution center is scheduled to open in November 2026 to support expansion efforts.
  • The Board of Directors declared a quarterly dividend of $0.47 per share, payable on or about November 27, 2026.
  • The company repurchased $2.0 million of common stock during the first nine months of 2026, with approximately $10.0 million remaining under the program.
  • Net income for the first nine months of 2026 totaled $41.5 million, including a $20.2 million contribution from IEEPA tariff refunds.
  • Adjusted EBITDA for the first nine months of 2026 was $63.0 million, including a $25.8 million contribution from IEEPA tariff refunds.
Company
Karat Packaging Inc.
Keywords
Nasdaq:KRT, Karat Packaging Inc.