Earnings Releases·Nov 5, 2026, 4:12 PM ET

Karat Packaging — Third Quarter 2026 Earnings Summary

Q3 net sales rose 8.2% YoY to $134.7 million, but net income fell 38% to $4.7 million ($0.22/share) as gross margin contracted to 33.5% and Adjusted EBITDA dropped 32% to $8.9 million due to elevated shipping and product costs.
Full-year 2026 guidance remains robust with net sales and Q4 sales expected to grow 9–11% YoY; full-year gross margin is projected at 39–41% and Adjusted EBITDA margin at mid-teens, both including IEEPA tariff refunds.
Strategic initiatives include price increases scheduled for late 2026 and January 2027, a new Florida distribution center opening in November 2026, and supply chain realignment toward Indonesia, Malaysia, and South America.
Capital return activities included a newly approved quarterly dividend of $0.47 per share and $2.0 million in stock repurchases year-to-date, leaving $10.0 million available under the repurchase program.
Online sales surged 38% YoY, while the company secured eight new chain accounts with shipments commencing between October 2026 and early 2027, supporting long-term growth despite margin headwinds.