Karat Packaging (NASDAQ:KRT) Releases Earnings Results

Karat Packaging (NASDAQ:KRT) issued its quarterly earnings results on Thursday. The company reported $1.48 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $0.47 by $1.01, FiscalAI reports. Karat Packaging had a return on equity of 31.42% and a net margin of 10.18%.The business had revenue of $136.30 million during the quarter, compared to analyst estimates of $135.46 million.

Here are the key takeaways from Karat Packaging’s conference call:

• Record sales and strong online growth: Second-quarter net sales rose 9.9% year over year to $136.3 million, while online sales increased 23.6%; management said July online sales growth accelerated to more than 37% and reiterated its $100 million full-year online revenue target.
• Underlying profitability remained solid despite higher costs. Excluding the $25.8 million IEEPA tariff refund, gross margin was 37.7%, supported by sourcing diversification, potential lower ocean freight, and favorable currency movements.
• Growth investments and customer wins are expanding the platform: Karat added four chain accounts and is finalizing a 47,000-square-foot Orlando distribution center expected to open in the third quarter, improving Southeast fulfillment and e-commerce delivery times.
• Management expects continued top-line growth but sharply lower margins after the tariff benefit fades. Third-quarter revenue is projected to grow at a low-double-digit rate, with gross margin of 35%–37% and adjusted EBITDA margin of 9%–11%; full-year guidance calls for gross margin in the low 40% range and adjusted EBITDA margin around the mid-teens.
• Operating expenses remain a pressure point. Shipping and transportation, salaries and benefits, online platform costs, and marketing expenses all increased, prompting initiatives to use Karat’s internal fleet and improve labor efficiency.

Karat Packaging Stock Up 11.1%

Karat Packaging stock traded up $4.72 during mid-day trading on Friday, reaching $47.09. 380,663 shares of the company were exchanged, compared to its average volume of 120,295. The company has a debt-to-equity ratio of 0.15, a quick ratio of 1.15 and a current ratio of 2.29. The firm has a market cap of $939.92 million, a P/E ratio of 18.84, a PEG ratio of 2.04 and a beta of 0.82. Karat Packaging has a 12-month low of $20.61 and a 12-month high of $50.00. The business has a fifty day moving average of $34.40 and a 200 day moving average of $29.37.

Karat Packaging Increases Dividend

The firm also recently declared a quarterly dividend, which will be paid on Friday, August 28th. Stockholders of record on Friday, August 21st will be given a $0.47 dividend. This represents a $1.88 annualized dividend and a dividend yield of 4.0%. The ex-dividend date of this dividend is Friday, August 21st. This is a boost from Karat Packaging’s previous quarterly dividend of $0.45. Karat Packaging’s dividend payout ratio is currently 113.92%.

Analyst Ratings Changes

KRT has been the subject of several research analyst reports. Bank of America raised their price target on Karat Packaging from $23.00 to $34.00 and gave the company an “underperform” rating in a report on Tuesday, July 14th. Lake Street Capital restated a “buy” rating and issued a $39.00 price target on shares of Karat Packaging in a research report on Friday, May 8th. Weiss Ratings upgraded shares of Karat Packaging from a “hold (c+)” rating to a “buy (b-)” rating in a research report on Wednesday, July 29th. The Goldman Sachs Group cut shares of Karat Packaging to a “neutral” rating in a research note on Thursday, June 4th. Finally, William Blair raised shares of Karat Packaging from a “market perform” rating to an “outperform” rating in a report on Thursday, June 4th. Three equities research analysts have rated the stock with a Buy rating, two have given a Hold rating and one has given a Sell rating to the company’s stock. According to data from MarketBeat.com, Karat Packaging currently has an average rating of “Hold” and a consensus price target of $36.50.

More Karat Packaging News

Here are the key news stories impacting Karat Packaging this week:

• Positive Sentiment: Major EPS beat: Quarterly diluted earnings reached approximately $1.46–$1.48 per share, compared with analyst estimates ranging from $0.47 to $0.51 and $0.57 a year earlier. Karat Packing Beats Q2 Earnings and Revenue Estimates
• Positive Sentiment: Revenue growth remained solid: Second-quarter revenue rose 9.9% year over year to $136.3 million, narrowly exceeding the $135.46 million consensus estimate. Karat Packaging Reports Second Quarter 2026 Financial Results
• Positive Sentiment: Profitability and cash flow improved sharply: Gross profit increased 57.1% to $77.2 million, operating profit more than doubled to $37.6 million, and operating cash flow reached $33.2 million. Capital spending was modest at $1.4 million, while total liabilities declined to $142.5 million. Karat Packaging Q2 2026 Earnings
• Positive Sentiment: Dividend increased: Karat Packaging declared a quarterly dividend of $0.47 per share, up from $0.45, with payment scheduled for August 28 to shareholders of record on August 21. Karat Packaging Dividend Information
• Neutral Sentiment: Institutional activity was mixed: Some hedge funds added shares, while others reduced or eliminated positions. William Blair maintained an “Outperform” rating, but the limited analyst coverage provides relatively little confirmation of broader Wall Street sentiment.
• Neutral Sentiment: Valuation and expectations are higher: Following the earnings-driven rally, KRT trades near its 52-week high with a price-to-earnings ratio near 30, increasing the importance of continued earnings growth.

Hedge Funds Weigh In On Karat Packaging

Several hedge funds and other institutional investors have recently modified their holdings of KRT. Quarry LP acquired a new stake in Karat Packaging during the 3rd quarter worth about $70,000. Deutsche Bank AG increased its holdings in shares of Karat Packaging by 142.8% in the fourth quarter. Deutsche Bank AG now owns 3,861 shares of the company’s stock valued at $87,000 after purchasing an additional 2,271 shares during the period. State of Wyoming purchased a new position in shares of Karat Packaging in the fourth quarter worth about $122,000. Jane Street Group LLC purchased a new position in shares of Karat Packaging in the first quarter worth about $219,000. Finally, Prelude Capital Management LLC acquired a new stake in shares of Karat Packaging during the third quarter worth about $227,000. 25.20% of the stock is owned by hedge funds and other institutional investors.

Karat Packaging Company Profile

Karat Packaging Technologies, Inc (NASDAQ: KRT) is a U.S.-based provider of premium packaging solutions for consumer goods and industrial products. The company specializes in the design, manufacture and delivery of high-quality litho-laminated folding cartons, tubes and flexible packaging. Karat Packaging operates an integrated production model that combines prepress, printing, converting and finishing capabilities to support the branding and shelf-appeal needs of its customers.

The company serves a diverse range of end markets, including food and beverage, confectionery, health and beauty, pharmaceuticals, specialty chemicals and promotional packaging.